TopstepTrader's Michael Patak (Founder) - Ask Me Anything (AMA)
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TopstepTrader's Michael Patak (Founder) - Ask Me Anything (AMA)


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Created February 8th 2013 by Big Mike
Updated March 31st 2020 by bobwest
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TopstepTrader's Michael Patak (Founder) - Ask Me Anything (AMA)

  #1081 (permalink)
Orlando, Florida
 
Trading Experience: Intermediate
Platform: NinjaTrader
Favorite Futures: NQ
 
WoodyFox's Avatar
 
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MichaelFlowTrader View Post
@TopstepTrader

How is Topstep Trader legal?

I'm in a conversation about trading someone else's money as a contractor vs as a limited partner?

This also evolved into the question are Topstep Funded Accounts really live?

Are the Topstep Funded Accounts more like Leeloo accounts where they use Leader/Follower algo to copy trades, then executie them into the live market? Which means TST gets to remain legal because Funded Traders are Signal Providers and not legally trading TST live accounts?

Why not let Funded Traders join the firm and become K1 for tax savings?

The above are questions that TST execs should answer?

Funded traders, have you verified if TST is really live? How have you done so?

Thank you--- Just looking for transparency of what is really going and how is all this legal.

Of course its legal. That being said....Its as close to a scam as you can get and still be legal. Please do not waste your money on these guys or any of the others. With the MICRO Futures there is no reason to use them anymore. Even if you can be profitable under their very tight parameters (It is doable), most traders are not always perfect and will make mistakes at some time in their career. Then you will go back to the beginning of the hamster wheel. I've heard peeps on this forum say "well I just want to build capital with them and just leave" No..Just use the micros. They even advertise "build your capital thing" themselves because they no the statistics. 95% of people that try to trade fail for life. The 5% that do become successful fail at some time during their education. They are making a killing with this stuff. Just 7000 new costumers a year and a few account resets and they bank a million. Who wouldn't bank the trades of a couple lucky suckers. LOL.

Listen, I've made the turn. I am a successful trader. Not getting rich, but making money. Take my advice. YOU DO NOT NEED THEM anyways. I tried them when I was learning, and it made no difference in me making the turn. The Micros Indices are the greatest thing to come to futures trading. You can learn on them, try new strategies and it won't break the bank.

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  #1082 (permalink)
Atlanta
 
 
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WoodyFox View Post
Of course its legal. That being said....Its as close to a scam as you can get and still be legal. Please do not waste your money on these guys or any of the others. With the MICRO Futures there is no reason to use them anymore. Even if you can be profitable under their very tight parameters (It is doable), most traders are not always perfect and will make mistakes at some time in their career. Then you will go back to the beginning of the hamster wheel. I've heard peeps on this forum say "well I just want to build capital with them and just leave" No..Just use the micros. They even advertise "build your capital thing" themselves because they no the statistics. 95% of people that try to trade fail for life. The 5% that do become successful fail at some time during their education. They are making a killing with this stuff. Just 7000 new costumers a year and a few account resets and they bank a million. Who wouldn't bank the trades of a couple lucky suckers. LOL.

Listen, I've made the turn. I am a successful trader. Not getting rich, but making money. Take my advice. YOU DO NOT NEED THEM anyways. I tried them when I was learning, and it made no difference in me making the turn. The Micros Indices are the greatest thing to come to futures trading. You can learn on them, try new strategies and it won't break the bank.


I get all of that, and I think there's a much stronger argument for starting with your own small account with tight risk control and broker side daily limits. But in my question, I'm looking for TST to answer my questions.

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  #1083 (permalink)
Davenport, IA
 
Trading Experience: Intermediate
Platform: NinjaTrader
Favorite Futures: ES
 
Posts: 10 since Jun 2016
Thanks: 5 given, 7 received

Tax Question


As a TST contractor trading a funded account, am I issued a 1099 and liable for taxes only when I elect to withdraw profits from my TST funded account? Or is the 1099 issued at the end of the year (or on a quarterly basis) even if no profits are withdrawn from the funded account? If so, does TST automatically do the estimated tax withholding or is this up to the contractor to do the withholding as required by the IRS guidelines?

For example, let's say in tax year 2019 I earn $30K in profits, but don't withdraw any of the profits accumulated in 2019 until 2020, would the taxes be due in tax year 2020 even though the trades actually took place in 2019? If this is the case, then this would be a huge advantage to trade a funded account since this would effectively be an IRA type of situation where earnings can accumulate on a tax deferred basis.

Thanks

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  #1084 (permalink)
Warsaw Poland
 
Platform: R-Trader
Favorite Futures: ZB, ZF, ZN
 
Posts: 15 since Nov 2015
Thanks: 4 given, 3 received

@TopstepTrader

I have a question - can you propose some other conditions for someone trading spreads ?

What I mean is. You have one rule in evaluation process which relates to the specific maximum number of contracts that can be traded. So both the evaluation and offer is determined by the number of contracts, not the margin.

What if someone would like to trade spreads ? I'm asking precisely about yield spreads.
Trading FOB, NOB, BOB or anything rational requires a lot more contracts.

Considering e.g. FOB - it's 5 contracts but the risk involved is much lower than trading 1 outright on CL or NQ or anything people like to trade directional (even lower thatn trading just ZF or ZB outrights)

So is it possible to have customized rule about max number of contracts when trading spreads ?


Regards

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  #1085 (permalink)
Columbus, OH USA
 
Trading Experience: Intermediate
Platform: Jigsaw Tradr+MultiCharts
Favorite Futures: eMini ES
 
QCDragon's Avatar
 
Posts: 2 since Feb 2016
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Tax Effects


hummeljt View Post
As a TST contractor trading a funded account, am I issued a 1099 and liable for taxes only when I elect to withdraw profits from my TST funded account? Or is the 1099 issued at the end of the year (or on a quarterly basis) even if no profits are withdrawn from the funded account? If so, does TST automatically do the estimated tax withholding or is this up to the contractor to do the withholding as required by the IRS guidelines?

For example, let's say in tax year 2019 I earn $30K in profits, but don't withdraw any of the profits accumulated in 2019 until 2020, would the taxes be due in tax year 2020 even though the trades actually took place in 2019? If this is the case, then this would be a huge advantage to trade a funded account since this would effectively be an IRA type of situation where earnings can accumulate on a tax deferred basis.

Thanks

I cannot imagine that your 1099 will report anything but the FULL amount you earned in 2019, regardless if it withdrawn or not. Since you're a contractor, you will NOT see 60/40 tax treatment like you would if you were trading your OWN futures account. That is up to 25% MORE tax liability as a 1099 reported contractor...

Check out Green Trader Tax for more information. They often do free webinars this time of year and could probably go into WAY more detail about this... (I'm not affiliated with them in ANY way)


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  #1086 (permalink)
Super Moderator
Sarasota FL
 
Trading Experience: Intermediate
Platform: NinjaTrader, Sierra Chart
Favorite Futures: ES, YM
 
bobwest's Avatar
 
Posts: 5,524 since Jan 2013
Thanks: 42,816 given, 18,654 received

Important Sierra Chart and TST News

I just came across the troubling information that Sierra Chart will no longer support TST using Rithmic, although it seems that you can still use SC with TST if you use an older version of SC, v. 2037 or before. This apparently applies to current Combine users and to those planning to use SC on TST in the future. For example, I plan to start a new Combine next week. But it seems that current users will also need to use the earlier version.

This is extremely important, and I hope that @TopstepTrader or someone from TST will see this and respond with an update and with information about how Combine users can still use Sierra.

It appears that this is related to issues SC has been having with Rithmic. I don't yet have the full story. I was alerted due to a post that member @SamJames incorrectly made in the Wiki section (which my colleague @xplorer correctly deleted because it should have been made just as a regular post.)

I have emailed TST support with questions to find out the situation and to find out what can be done, if anything, if you want to use Sierra Chart. Here's the response I received:


Quoting 
Ryan (TopstepTrader)

Jan 29, 2:57 PM CST

Hi Robert,

Thanks for reaching out to us!

Unfortunately, that is correct. Sierra Chart will no longer support Rithmic data feed and therefore we will no longer support their trading platform. However, a connection with Sierra Chart is still possible but only with version v2037 or older. The connection to Topsteptrader will remain the same.

Please feel free to reach out with any additional questions you may have.

Best,
Ryan
Trader Support Representative

I do not know from this email what the process would be if a user who is not currently in a Combine wanted to select SC as the platform, which has been removed from the TST website. I will send a follow-up email to try to find out.

I also found this brief note on the Sierra Chart website:


Quoting 
Support for Top Step Trader through Rithmic has been removed. You will need to use an older version of Sierra Chart if you want to use Top Step Trader. There is also available the Simulated Futures Trading service which can be used.

Link: https://www.sierrachart.com/index.php?page=doc/Whats_New.php (Last bullet point under notes on version 2039.)

If anyone wants to download and use the earlier version, v. 2037 or earlier, here's the link to the SC page with instructions for downloading a version other than the latest one: https://www.sierrachart.com/index.php?page=doc/SoftwareDownload.php#Rollback To follow these instructions, you will need to have already installed Sierra Chart, and then, on the menu, use Help > Download Current Version, and then select the version number in the box before downloading.

This seems to be a sudden development. No doubt things will become more clear soon.

If I find out more, I will post it here. If someone else has more information, please share anything relevant here as well.

Bob.

When one door closes, another opens.
-- Cervantes, Don Quixote
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  #1087 (permalink)
Super Moderator
Sarasota FL
 
Trading Experience: Intermediate
Platform: NinjaTrader, Sierra Chart
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bobwest's Avatar
 
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bobwest View Post
Important Sierra Chart and TST News

I just came across the troubling information that Sierra Chart will no longer support TST using Rithmic...

More poking around on the Sierra Chart site suggests that my last post may not be the final word. From the Sierra Chart support board, in response to a user not being able to get on TST:

Quoting 
This issue is resolved. But we will have an announcement later in regards to support for these trading evaluator services.

Update to version 2040 to solve this:
https://www.sierrachart.com/index.php?page=doc/SoftwareDownload.php#FastUpdate


We will be phasing support out for them probably in the third quarter of this year and providing an alternative.

Link: https://www.sierrachart.com/SupportBoard.php?ThreadID=48612 (Emphasis is mine.)

I am waiting for a response to a follow-up email I sent to TST before I came across this latest from SC.

I suggest no action before everything has come to light. If you're in a Combine and have a problem connecting, I guess you could try this latest suggestion.

I hope this turns out to be something that, for now at least, blows over. We'll know soon.

It would still be a good thing if @TopstepTrader will weigh in, as it affects or can affect a lot of their customers and potiential customers.

Bob.

When one door closes, another opens.
-- Cervantes, Don Quixote
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  #1088 (permalink)
Super Moderator
Sarasota FL
 
Trading Experience: Intermediate
Platform: NinjaTrader, Sierra Chart
Favorite Futures: ES, YM
 
bobwest's Avatar
 
Posts: 5,524 since Jan 2013
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More from TopstepTrader on the question of, basically, what to do if you want to start a Combine with Sierra:

Quoting 
Ryan (TopstepTrader)

Jan 30, 8:02 AM CST

Hi Robert,

Thanks for reaching out to us!

Due to Sierra Chart not supporting Rithmic connection no longer, it makes the connection process difficult for us to assist with. Due to this quick notice, we have taken this off our list of supported trading platforms. If you do decide to choose Sierra Charts as your trading platform for your Trading Combine, the connection process will remain the same as it did before however, if an issue arises while trading, we may not be able to fully assist and troubleshoot due to the older version. Sierra Chart has no longer updated this version. We are suggesting traders not to select the platform for their Trading Combine at this time.

Please feel free to reach out with any additional questions you may have.

Best,
Ryan
Trader Support Representative

My feeling has moved in the direction of not being nearly as alarmed as I started out being.

For one thing, clearly it will be possible to use Sierra Chart if you are willing to get a little more involved with it. Also, Sierra clearly is moving ahead faster than TST now knows, given the quote I showed in my last post about version 2040, well beyond the older v. 2037 that we were first given. and that TST is still talking about, as the one you need to roll your installation back to. Version 2040 is the most current version now (as of this morning -- who knows what will come out by this afternoon? They have a version 2041 as an available "pre-release" version... don't get that one yet. )

Link to current download: https://www.sierrachart.com/index.php?page=doc/SoftwareDownload.php#SoftwareDownload

I'm in no hurry myself, and will wait for the parties to get to a better place. I do expect this to happen, one way or another, within a reasonable time.

Sierra has been fuming about Rithmic for some time, and about CQG too for that matter, on various unclear and arcane technical issues they are unhappy about. You could almost have seen some kind of trouble coming. I think they may have moved too quickly, and may now be tidying things up a little.

Right now, we just have to ride out the uncertainty for a while.

I'll add anything new that I get, and I hope that anyone else who has relevant information will do the same.

Bob.

When one door closes, another opens.
-- Cervantes, Don Quixote
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  #1089 (permalink)
Bay Area California
 
Trading Experience: None
Platform: TT T4
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bobwest View Post
More from TopstepTrader on the question of, basically, what to do if you want to start a Combine with Sierra:


My feeling has moved in the direction of not being nearly as alarmed as I started out being.

For one thing, clearly it will be possible to use Sierra Chart if you are willing to get a little more involved with it. Also, Sierra clearly is moving ahead faster than TST now knows, given the quote I showed in my last post about version 2040, well beyond the older v. 2037 that we were first given. and that TST is still talking about, as the one you need to roll your installation back to. Version 2040 is the most current version now (as of this morning -- who knows what will come out by this afternoon? They have a version 2041 as an available "pre-release" version... don't get that one yet. )

Link to current download: https://www.sierrachart.com/index.php?page=doc/SoftwareDownload.php#SoftwareDownload

I'm in no hurry myself, and will wait for the parties to get to a better place. I do expect this to happen, one way or another, within a reasonable time.

Sierra has been fuming about Rithmic for some time, and about CQG too for that matter, on various unclear and arcane technical issues they are unhappy about. You could almost have seen some kind of trouble coming. I think they may have moved too quickly, and may now be tidying things up a little.

Right now, we just have to ride out the uncertainty for a while.

I'll add anything new that I get, and I hope that anyone else who has relevant information will do the same.

Bob.

Seams like sierrachart isn't interested in a resolution...
Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).

.
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  #1090 (permalink)
Super Moderator
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addchild View Post
Seams like sierrachart isn't interested in a resolution...
Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).

Sure does look that way.

Oh well, I'll still see how it plays out.

Bob.

When one door closes, another opens.
-- Cervantes, Don Quixote

Last edited by bobwest; January 30th, 2020 at 12:10 PM.
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