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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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  #641 (permalink)
Amman/Jordan
 
 
Posts: 39 since May 2013
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sharmas View Post
From looking into this the cards are stack in Topstep's favor as they have so many rules.

If you trade the market within the open hours,why change it in here to only get those traders who while trading to miss that rule particular rule for markets.

One needs to know the rules and also the markets they can and can not trade and also the hours within which they can and can not trade.

As if trading is not hard enough that one has to learn their set ups and then remember the RULES and the rules of the rules and by that time its too late.

Oh yes then you will need to reset and while you paying the monthly fee.

So the big question is are they really giving you their money to trade when you eventually pass the combine or continuous....

Its money they have made from a whole lot of failed traders...

Topside always tells how many people have made it...Lets change that and show us how many people registered and haven't made it and continue to pay.

Real eye opener as how this system works now...So Mr Patak, a lot of questions have been raised here and confusion raised, so its time to simplify the rules and let traders trade within the Market open and instruments they are familiar with and not TOPSTEP to put in thousands of restrictions to only stack the odds in your favor.


Sharmas

Agree with you , the cards are stacked in TST favor no arguments there , infact if you fail in their combine that doesn't make you a bad trader , its their own subjective rules at the end , i can now put my own rules that will make all participants fail .

Good they got rid of the 45% minimum profitable days requirement cuz that was nonsense , hope they improve the 10 days build your own cushion rule , for example make it at least 1 month , because its meaningless to be allowed to just lose the profits that you built in 10 days , that wouldn't make me a funded trader .

So technically after 10 days they stop backing you and they just waive margin requirements which is just $500 to daytrde the ES . So it would be - somewhat - more reasonable to take their bigger combines and trade more contracts from the start .

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  #642 (permalink)
Atlanta GA USA
 
 
Posts: 264 since Aug 2013
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Surprise View Post
Good they got rid of the 45% minimum profitable days requirement cuz that was nonsense...

Yeah, first time I realized that was the payoff I actually LOL'd. Seriously? That's a funded trader?

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  #643 (permalink)
Leeds UK
 
Experience: Intermediate
Platform: FXTrade
Broker: Interactive Brokers, CapitalSpreads, Oanda
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Surprise View Post
the cards are stacked in TST favor no arguments there

Respectfully, I donít really think that looking at it in terms of "in whose favour the cards are stacked" is quite the appropriate perspective, here.

Itís a partnership. It has to be.

Aspiring funded traders need the cards to be stacked in TST's favour, just as TST needs them to be stacked in aspiring funded traders' favour, otherwise it wouldnít be possible, let alone foreseeable, for them successfully to be funding so many traders without taking excessive risks themselves (and that would surely do no nobody any favours at all?).


Surprise View Post
infact if you fail in their combine that doesn't make you a bad trader

Certainly not.

There are many consistently successful traders whose styles and methods aren't at all suitable to those monitorable and assessable by the Combine criteria.

I seem to recall Big Mike himself mentioning, a while back, that he might well not be able to pass a Combine, with his trading.


Surprise View Post
its their own subjective rules at the end

I suspect they're far from "subjective", really: they seem to be being frequently amended in response both to feedback and according to the analysis of objective results achieved.


Surprise View Post
i can now put my own rules that will make all participants fail

We all could, but wouldn't want to: TST clearly wouldn't be able to fund 370 traders per year, if the criteria were designed for everyone to fail!


Surprise View Post
So technically after 10 days they stop backing you

Far from it, in fact. This point's rather widely misunderstood, but discussed throughout this and the other thread, and fully explained several times over.

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  #644 (permalink)
Atlanta GA USA
 
 
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Tymbeline View Post
Far from it, in fact. This point's rather widely misunderstood, but discussed throughout this and the other thread, and fully explained several times over.

It's my understanding that whatever you make in that 10 days, that's your trading account. If it's $1k, then you have $1k, to trade. If that's not so, could you clarify then how the size of your account is determined?

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  #645 (permalink)
Site Moderator
Sarasota FL
 
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emini2000 View Post
It's my understanding that whatever you make in that 10 days, that's your trading account. If it's $1k, then you have $1k, to trade. If that's not so, could you clarify then how the size of your account is determined?

This is a good question, and is something of a misunderstanding based on the difference between an individual account and the prop firm account. But it's completely understandable to have this misunderstanding. I'll try to clarify.

If it's your own individual account, your margin is just what is in the account. The number of contracts that it will support is, if day-trading, whatever the broker requires, and if holding overnight, it's the exchange requirement. In that situation, the amount in your account is what determines the number of contracts you can trade. And all this is just between you, your broker and the exchange, no one else.

If it's the firm's account (which is what a "funded account" is), there is a certain amount of margin that the firm has on deposit with its broker which, in the aggregate, supports the total trading positions that the firm as a whole has at any one time between all of its traders. The firm will then allocate to each of its traders the number of contracts (the "buying power") that they each have available to trade with.

This is allocated initially according to the balances in the accounts, according to a schedule in the published "scaling plan." (Shown here: https://topsteptrader.desk.com/customer/en/portal/articles/1950862-funded-trader-scaling-plan ) As your cumulative size grows, so does your buying power (not restricted to the first 10 days.)

So far, it looks like your account balance is all that determines your buying power. However, it isn't. For one thing, once you have reached a particular level, if you either take a loss or a withdrawal, and reduce your account balance below the initial plan levels, your available contracts do not decrease, as they would in your individual account. For another thing, you can request an increase in buying power once your cumulative profit (not present account balance, which you may have reduced) has reached 10K.

This is because your account balance is not what is supporting your trading -- it's the overall capital of the firm, in the form of the total margin they have with their broker. The firm will determine the allocation of that total buying power that is available to you, based on your performance to date.... in other words, a risk judgement they make based on what you have done, not the present balance in your account. What is supporting the contracts you are trading is never the balance in your account. It's the firm's capital, of which you have access to a certain share, at the firm's discretion.

If this were your individual account, the matter would be entirely between you and your broker, who would require you to always have a certain balance in your account to support your trades. This is not the case when you are a trader with a prop firm (which is what you are if you have a "funded" account) that has its own relationship with its broker.

I hope this is both clear and makes sense to you. The distinctions are very clear to me, but I'm never sure it I've managed to state the case clearly when I try to. If I did not succeed, please let me know. (Although this is pretty much my best shot. )

Also, since this is really @TopstepTrader's Ask Me Anything thread, I don't want to be filling it up with my views of their program. If I have not gotten anything right, I would appreciate it if Michael or @Hoag would step in and correct me -- or verify that it's correct if it is.

I also do not want to come across as only an advocate of the TST program, although I do participate in it. Clearly, it's an individual choice whether someone finds their program or rule-set to be something they like and can work within. If not, no problem. But it's a good idea to understand what it actually is. It is very different from an individual account with a given balance, and you are, at the firm's discretion, able to have access to much more buying power than would be available based on the current balance in your account, if it were an individual account.

Bob.

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  #646 (permalink)
Atlanta GA USA
 
 
Posts: 264 since Aug 2013
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Amazingly, I actually understood that. lol.



bobwest View Post
This is a good question, and is something of a misunderstanding based on the difference between an individual account and the prop firm account. But it's completely understandable to have this misunderstanding. I'll try to clarify.

If it's your own individual account, your margin is just what is in the account. The number of contracts that it will support is, if day-trading, whatever the broker requires, and if holding overnight, it's the exchange requirement. In that situation, the amount in your account is what determines the number of contracts you can trade. And all this is just between you, your broker and the exchange, no one else.

If it's the firm's account (which is what a "funded account" is), there is a certain amount of margin that the firm has on deposit with its broker which, in the aggregate, supports the total trading positions that the firm as a whole has at any one time between all of its traders. The firm will then allocate to each of its traders the number of contracts (the "buying power") that they each have available to trade with.

This is allocated initially according to the balances in the accounts, according to a schedule in the published "scaling plan." (Shown here: https://topsteptrader.desk.com/customer/en/portal/articles/1950862-funded-trader-scaling-plan ) As your cumulative size grows, so does your buying power (not restricted to the first 10 days.)

So far, it looks like your account balance is all that determines your buying power. However, it isn't. For one thing, once you have reached a particular level, if you either take a loss or a withdrawal, and reduce your account balance below the initial plan levels, your available contracts do not decrease, as they would in your individual account. For another thing, you can request an increase in buying power once your cumulative profit (not present account balance, which you may have reduced) has reached 10K.

This is because your account balance is not what is supporting your trading -- it's the overall capital of the firm, in the form of the total margin they have with their broker. The firm will determine the allocation of that total buying power that is available to you, based on your performance to date.... in other words, a risk judgement they make based on what you have done, not the present balance in your account. What is supporting the contracts you are trading is never the balance in your account. It's the firm's capital, of which you have access to a certain share, at the firm's discretion.

If this were your individual account, the matter would be entirely between you and your broker, who would require you to always have a certain balance in your account to support your trades. This is not the case when you are a trader with a prop firm (which is what you are if you have a "funded" account) that has its own relationship with its broker.

I hope this is both clear and makes sense to you. The distinctions are very clear to me, but I'm never sure it I've managed to state the case clearly when I try to. If I did not succeed, please let me know. (Although this is pretty much my best shot. )

Also, since this is really @TopstepTrader's Ask Me Anything thread, I don't want to be filling it up with my views of their program. If I have not gotten anything right, I would appreciate it if Michael or @Hoag would step in and correct me -- or verify that it's correct if it is.

I also do not want to come across as only an advocate of the TST program, although I do participate in it. Clearly, it's an individual choice whether someone finds their program or rule-set to be something they like and can work within. If not, no problem. But it's a good idea to understand what it actually is. It is very different from an individual account with a given balance, and you are, at the firm's discretion, able to have access to much more buying power than would be available based on the current balance in your account, if it were an individual account.

Bob.


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  #647 (permalink)
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emini2000 View Post
It's my understanding that whatever you make in that 10 days, that's your trading account. If it's $1k, then you have $1k, to trade. If that's not so, could you clarify then how the size of your account is determined?

I think the issue here is you only have 10 days to build your account balance versus something more reasonable like 30 days. Give the trader more time to build their account cushion and allow for the inevitable draw downs and adjustments required when trading real money. They don't have to adjust their draw down rules but extend the time to build the balance.

You will need more than a $500 or $1,000 balance once the 10 days expires. It is not a margin issue but that TST will not allow you to go below zero.

Just my 2 cents. Please correct me if any of this analysis is wrong.

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  #648 (permalink)
Legendary Market Wizard
Switzerland
 
Experience: Intermediate
Platform: Investor/RT
Broker: IB / DTN
Trading: Futures
 
Posts: 5,102 since Feb 2012
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Happy New Year @TopstepTrader
Great to see less rules for a combine.

An old discussion might be eliminated now too: Trading the Dax.
As far I knew from last year(s) you offer Dax trading for funded traders.
But not in the combine.
The Dax Mini future has started very well. With a good margin to start for
traders - and not too high for a funding company concerning risks.
For sure a trader will not "learn" another market just to fulfill the combine
and then switches to the Dax anyway.

I know from many fellow traders in german speaking countries as well
other European countries that are searching for a stable funder.
Could you consider to adapt the the Dax Mini future for the combine?

Good business
GFIs1

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  #649 (permalink)
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canyon View Post
I think the issue here is you only have 10 days to build your account balance versus something more reasonable like 30 days. Give the trader more time to build their account cushion and allow for the inevitable draw downs and adjustments required when trading real money. They don't have to adjust their draw down rules but extend the time to build the balance.

You will need more than a $500 or $1,000 balance once the 10 days expires. It is not a margin issue but that TST will not allow you to go below zero.

Just my 2 cents. Please correct me if any of this analysis is wrong.

The margin issue is just a question of whether your trade size is strictly and only determined by your account size, which it is not (see the exhaustive/exhausting post I made above, and do not want to have to repeat or rephrase. )

What you're bringing up is whether a trader "should" have more time to develop an account balance before TST requires them to be profitable.... which is a question of how they want to run their business, and, of course, of whether you want to trade with them if those are their rules.

I would say that it is up to you. They could have different policies, but they don't. So it's a decision about whether a particular trader wants to operate under these policies or not. That's a personal business decision.

At some point, TST will have to stop covering a trader's losses if there is to be any money made by either them or the trader. That point will never be perfect for everyone, so it's a matter of whether a particular person wants to accept whatever that limit is or not. (And of course, it's a purely individual choice either way; I wouldn't say either is necessarily the "right" one.)

Bob.

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  #650 (permalink)
Chicago, IL
 
Experience: Advanced
Platform: TSTrader, NinjaTrader...
Trading: ALL- Futures, Forex, Equities
 
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GFIs1 View Post
Happy New Year @TopstepTrader
Great to see less rules for a combine.

An old discussion might be eliminated now too: Trading the Dax.
As far I knew from last year(s) you offer Dax trading for funded traders.
But not in the combine.
The Dax Mini future has started very well. With a good margin to start for
traders - and not too high for a funding company concerning risks.
For sure a trader will not "learn" another market just to fulfill the combine
and then switches to the Dax anyway.

I know from many fellow traders in german speaking countries as well
other European countries that are searching for a stable funder.
Could you consider to adapt the the Dax Mini future for the combine?

Good business
GFIs1

GFIs1,

We are in the process of adding other markets and asset classes at this time. The process seems to last a long time, just be patient and the time will come.

TopstepTrader

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