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Hey all. I am starting a new journal as I just signed up for a $150k TST combine. I just finished taking the MES combine where they asked for $2k in profits without losing $1500. I met the goal and was told I wouldn't be offered anything. You can read about that in my other journal.
Day 1: $100 profit. Nothing special was just trying to stay afloat with the fed decision today. Wasn't really trying to build a position more a scalping day.
I've seen where it's little less than 19% that actually get funded. And out of those that get funded 50% fail and get that account taken away. So 9 out of a 100 are successful. I guess it's consistent with 91% of traders lose.
Let's perform statistical analysis of yesterday's performance.
DISCLAIMER: One day worth of data is no way indicative of the overall health of a trading system as you would need a large enough sample size to get a more accurate picture. That being said, we'll go off what we have with that understanding.
From yesterday and this is in the pic attached above:
average winning trade: $64.89
average losing trade: $176.18
winning %: 77.78%
net P&L: $101.88
total trades: 9
Expectancy:
($64.89 x .7778) - ($176.18 x (1-.7778)) = $11.32
This number is important. What it says is every single time I click my mouse I would expect to make $11.32.
Required to pass combine:
$9000 - net P&L of $101.88 = $8898.12
This is how much more I need.
My combine ends January 14 so we currently have 20 trading days including today. No trading December 26 and January 2. Based on these numbers, I would need to click my mouse 786 times over the next 20 days or about 39 trades a day. Unrealistic as I only had 9 trades yesterday. With a 77.78% win rate and 9 average trades a day, I would need an expectancy of $49.43 to pass. I came up with that this way: $8898.12/20 trading days = $444.91 per day. Divide 9 average trades a day and you come up with $49.43.
Possible tweaks to improve expectancy:
Improve average winning trade to $113.88. Based on this: ($113.88 x .7778) - ($176.18 x (1-.7778)) = $49.43. So in this scenario I would need to take trades that risk $176.18 to a reward of $113.88 INSTEAD of a reward of $64.89 like yesterday. A rough estimate of this is risking 3 ES points with the goal of winning 2 ES points. This isn't a bad tweak as the reward isn't even 1 to 1 or 2 to 1 so there's room here.
There are other tweaks that I don't think we need to get into right now on the risk side. But there's ways to make the numbers work in your favor.
Side note:
When taking trades, you guys should be looking to make sure the trade has a positive EV (expected value). This is where record keeping comes in. Say you have setup A and from your records you know it works 65% of the time. Say you come across a trade with setup A that requires 3 ES points or $150 of risk. Break even on this is where you make $80.77. Anything above that is positive EV. ($80.77 x .65) - ($150 x (1-.65)) = 0. So you should only take this trade if you think you can make more than this amount. There's other things at play when deciding on a trade like choosing between two different trades that both have a positive EV as you only have a limeted amount of capital and cannot take every single opportunity. You can incorporate IRR (internal rate of return) and NPV (net present value) but that's just getting too complicated. This BTW is the process companies take to decide on one investment over another.
"Mr Top Step" and "TopStepTrader" are entirely separate, unconnected and unrelated (the similarity between their names has confused one or two people).
The overall Combine pass-rate at TopStepTrader, the last time it was independently audited/verified, was about 20%, as mentioned above.
Since then, however, they've had some "rule-changes" which have increased the pass-rate (and there are some further changes being announced next month, too).
Given the total lack of any entry-barrier to "taking a Combine" and the fact that many people say they do them for reasons other than trying to get funded, it wouldn't be realistic to expect a high pass-rate, I think.
They're funding about 400 people per year, anyway (maybe more in 2016 - I don't think they've given a figure yet). There are some details and some funded-trader histories on their blog, on YouTube, in forums and so on.
Couldn't get too much going today but the market is chop after the fed so it'll need a few days. Made $283 today after fees. $8614.50 to go over 19 days. My expectancy is now $22.68 and I'm still averaging 9 trades a day. With 19 days left, I would need an expectancy of $50.38.
The expectancy yesterday was $11.32 so we improved by 100.35%. My average winning trade amount went up but more important the risk reward ratio improved. Yesterday I was risking $1 to win $0.3683. Today that improved which helped the average. Now I'm risking $1 to win $0.45. Imagine what would happen if I risked $1 to win $1.
