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

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  #871 (permalink)
New York, NY
 
Experience: Intermediate
Platform: NinjaTrader
Trading: Emini YM, Crude CL
 
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ignacio90 View Post
Has all the sense for the company. If you are a funded trader, you are a risk for the company. The fast you go out, the better for them. Has clear that the bussiness is the combine, not much far than these

Good luck

This is incorrect. It is not all the sense for the company.

The company's only risk is the initial max drawdown. This drawdown follows you up as you accumulate profits. So once your profits have equaled the quantity of the initial max drawdown, the company no longer has any risk in the game. The trader can only lose the profits he/she has made, and none of the company's capital.

Therefore it would not be in the company's best interest to force a trader to withdraw prior to reaching the profit level equal to the max drawdown number. By withdrawing, the trader is closer to the drawdown max and more likely to lose the funded account, losing some of the company's funding capital with it.

I understand your meaning in that they want people to buy more and more combines, but that doesn't apply well specifically to what I am discussing.

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  #872 (permalink)
Madrid - Spain
 
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gatortick View Post
This is incorrect. It is not all the sense for the company.

The company's only risk is the initial max drawdown. This drawdown follows you up as you accumulate profits. So once your profits have equaled the quantity of the initial max drawdown, the company no longer has any risk in the game. The trader can only lose the profits he/she has made, and none of the company's capital.

Therefore it would not be in the company's best interest to force a trader to withdraw prior to reaching the profit level equal to the max drawdown number. By withdrawing, the trader is closer to the drawdown max and more likely to lose the funded account, losing some of the company's funding capital with it.

I understand your meaning in that they want people to buy more and more combines, but that doesn't apply well specifically to what I am discussing.

If you are -1$ after 10 day you will be out of the funded account. The less you have in your account the better to be in that situation. Really simple

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  #873 (permalink)
New York, NY
 
Experience: Intermediate
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TopstepTrader View Post

In our experience, when traders take a check early, even as little as 10%, they are able to realize the reality of the money they’re trading with. Their account no longer becomes a fluctuating P&L number, but actual dollars and cents. Taking profits has positively impacted our trader's psyche which has directly contributed to better performance.

As an aside, Hoag is back full-time and is currently putting together some killer trading education that we’ll be releasing in the new year! Stay tuned for updates.

Could you consider this as a recommendation and not mandatory? I, for one, know this absolutely does not have a positive effect on my psyche. In fact, I find it quite damaging personally. I feel as though I am being forced into poor money management by withdrawing funds far before I should be doing so.

The disconnect between the person making trading decisions and the company making the money management decisions, without regard for the trader's personal psyche, strategy or risk tolerance does not seem rational.

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  #874 (permalink)
Site Moderator
Sarasota FL
 
Experience: Intermediate
Platform: Sierra Chart
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TopstepTrader View Post
@ignacio90, thanks for your comment. The rule you are referring to is that funded traders must maintain a balance greater than $0 after 10 trading days. So technically the “profit minimum” would be $1 after 10 trading days. It is worth noting, the future of this rule is currently under review.


ignacio90 View Post
I'm happy to hear that. If you want traders to trade, you need to give them room. I think it's very frustrating for a trader, that was working hard to be funded having room to do it, and in the funded account be eliminated with no room. Why a trader can't remain in the funded account if the balance don't hit the maximum loss for the account, like the combine, or the funded trade preparation, after 10 day?

Although I do understand why TST would want their traders to be profitable after a certain period of time, I agree that being less inflexible makes more sense in the long term. I think it is a good idea to re-think this particular rule, with the idea in mind of the traders' long-term development and profitability.

Glad you're reviewing it.

Bob.

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  #875 (permalink)
Chicago, IL
 
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gatortick View Post
Could you consider this as a recommendation and not mandatory? I, for one, know this absolutely does not have a positive effect on my psyche. In fact, I find it quite damaging personally. I feel as though I am being forced into poor money management by withdrawing funds far before I should be doing so.

The disconnect between the person making trading decisions and the company making the money management decisions, without regard for the trader's personal psyche, strategy or risk tolerance does not seem rational.

@gatortick, taking a withdrawal is not mandatory. We may highly encourage it, but ultimately the decision is yours. My understanding is that that is exactly what happened with your situation. Our Funding Team recommended you take a small withdrawal and you were adamant not to, so therefore no withdrawal was processed.


We will always recommend what we feel is in the trader’s best interest but the Funded Account is ultimately a partnership.

If you have any questions about our products or services at TopstepTrader, please send me a Private Message or use the FIO "Ask Me Anything" thread.
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  #876 (permalink)
New York, NY
 
Experience: Intermediate
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TopstepTrader View Post
@gatortick, taking a withdrawal is not mandatory. We may highly encourage it, but ultimately the decision is yours. My understanding is that that is exactly what happened with your situation. Our Funding Team recommended you take a small withdrawal and you were adamant not to, so therefore no withdrawal was processed.


We will always recommend what we feel is in the trader’s best interest but the Funded Account is ultimately a partnership.

Thank you @TopstepTrader, I am glad you said this.

I was asked to withdraw at $1600 and I declined. I was told I could decline, but at $2000 of profit, 10% would be pulled and sent to me regardless of whether I wanted it or not. I was told I had no choice in the matter.

When I reach that profit number, may I then refer to your comment above that I do not have to withdraw unless I desire to do so?

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  #877 (permalink)
Frankfurt, Hessen, Germany
 
Experience: Advanced
Platform: NinjaTrader 8
Broker: NTB & Continuum
Trading: 6B, 6E, FDXM, FGBL, YM, HG, GC, CL
 
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Posts: 459 since May 2012
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Hello @TopstepTrader,

in my opinion its relative hard and a trader needs a bit luck for a good run for mastering all 3 qualifications in a row. The real bad thing is: IN A ROW. If I have a 30% chance for the Combine, 25% for the Preparation and 20% for the first 10 days as funded trader, then my chance is for this row 1,5%. That means: in 100 starts of the Combine I will reach the target (11th day of funded account) 1 or 2 times. The numbers are only examples. Each one can calculate with own realistic numbers by multiplication (0,3 * 0,25 * 0,2).

I believe you, that you want real good traders with a super great risk discipline. But the way for reaching the target is very heavy. Heavy is, that I have the "10-day-minimum-$0-balance" as KO-criteria, too. This kind of pressure is sorting the real good ones from the super real good ones. But this rule is not fully under control by the trader! If the market is crazy or against the traders setup or whatever: then he is out of the game and he must start again. This "start again" I define as a "cash cow" for selling the Combine. For me it is not okay, that the trader has to pay again for its and all the stress again.

The trader mastered the Combine and he fails in the Prepration for example by this "market fuck" - and then he is losing everything by this. Or if he is in the funded phase: he lose test 1 and 2. Is that fair? In my opinion it is not. The trader has no reached a level for sure. No one. Each moment a mistake by him or the market or the software or the data feed - and he is out of the game.

My wish is, that a trader do not lose, what he reached. Repeating the same level: absolutly, I do fully agree.

For inspiration:
1. test = Combine: resetting and paying for its, weekly paying (for example: if mastering in 3 weeks, he gets one week saved for the next level) for Combine. 10 days.
2. test = Risktest-Level: resetting and paying for its, weekly paying for Risktest-Level. 10 days.
3. test = Individual Preperation: individual instruments, individual days, individual parameters. 5 until 15 days. Cost nothing.

Then Funded Account. No 10-day-rule. Nothing. Starting by normal rules. If failing by hit a minimum/maximum parameter: stop/deleting the account and repeating test number 3 = Individual Preperation.

What you are thinking about this idea? The individual parameters from test number 3 are based by the individual parameters from test 1 and 2. Mathematical solving, a simple algorithmus, that each one is understanding.

With this frame a trader can work better and much more free of senceless pressure. He will feel the pressure, yes, but the trader mastered a level and he can hold the levels before.

Best regards,
Renkotrader

PS: and I am wishing, that all rules - and the sub rules too (!!) - are listed in one list. Really each szenario included, that can happens ("What if, if XY...?"). The rules, that the customers are asking by mail, messages, forum, chat or phone. No examples now, but you know, what I mean. Like the 60-day-rule...

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  #878 (permalink)
Chicago, IL
 
Experience: Advanced
Platform: TSTrader, NinjaTrader...
Trading: ALL- Futures, Forex, Equities
 
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Posts: 246 since Feb 2013
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Renkotrader View Post
Hello @TopstepTrader,

in my opinion its relative hard and a trader needs a bit luck for a good run for mastering all 3 qualifications in a row. The real bad thing is: IN A ROW. If I have a 30% chance for the Combine, 25% for the Preparation and 20% for the first 10 days as funded trader, then my chance is for this row 1,5%. That means: in 100 starts of the Combine I will reach the target (11th day of funded account) 1 or 2 times. The numbers are only examples. Each one can calculate with own realistic numbers by multiplication (0,3 * 0,25 * 0,2).

I believe you, that you want real good traders with a super great risk discipline. But the way for reaching the target is very heavy. Heavy is, that I have the "10-day-minimum-$0-balance" as KO-criteria, too. This kind of pressure is sorting the real good ones from the super real good ones. But this rule is not fully under control by the trader! If the market is crazy or against the traders setup or whatever: then he is out of the game and he must start again. This "start again" I define as a "cash cow" for selling the Combine. For me it is not okay, that the trader has to pay again for its and all the stress again.

The trader mastered the Combine and he fails in the Prepration for example by this "market fuck" - and then he is losing everything by this. Or if he is in the funded phase: he lose test 1 and 2. Is that fair? In my opinion it is not. The trader has no reached a level for sure. No one. Each moment a mistake by him or the market or the software or the data feed - and he is out of the game.

My wish is, that a trader do not lose, what he reached. Repeating the same level: absolutly, I do fully agree.

For inspiration:
1. test = Combine: resetting and paying for its, weekly paying (for example: if mastering in 3 weeks, he gets one week saved for the next level) for Combine. 10 days.
2. test = Risktest-Level: resetting and paying for its, weekly paying for Risktest-Level. 10 days.
3. test = Individual Preperation: individual instruments, individual days, individual parameters. 5 until 15 days. Cost nothing.

Then Funded Account. No 10-day-rule. Nothing. Starting by normal rules. If failing by hit a minimum/maximum parameter: stop/deleting the account and repeating test number 3 = Individual Preperation.

What you are thinking about this idea? The individual parameters from test number 3 are based by the individual parameters from test 1 and 2. Mathematical solving, a simple algorithmus, that each one is understanding.

With this frame a trader can work better and much more free of senceless pressure. He will feel the pressure, yes, but the trader mastered a level and he can hold the levels before.

Best regards,
Renkotrader

PS: and I am wishing, that all rules - and the sub rules too (!!) - are listed in one list. Really each szenario included, that can happens ("What if, if XY...?"). The rules, that the customers are asking by mail, messages, forum, chat or phone. No examples now, but you know, what I mean. Like the 60-day-rule...


@Renkotrader,
We appreciate all your suggestions and your feedback. As previously mentioned we are looking at all the rules and requirements as we enter the New Year. We love to hear our users feedback, so keep it coming. Hope you have a great Holiday Season.

Thanks!

If you have any questions about our products or services at TopstepTrader, please send me a Private Message or use the FIO "Ask Me Anything" thread.
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  #879 (permalink)
Leeds UK
 
Experience: Intermediate
Platform: FXTrade
Broker: Interactive Brokers, CapitalSpreads, Oanda
Trading: GBP/USD
 
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Posts: 429 since Apr 2015
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A question for @TopstepTrader, if I may?

It might be short notice to ask this, but would you consider, as part of your January 2017 "rule changes", extending the 10-day principle for funded accounts to 30 trading days?

I appreciate, of course, that looking at it superficially, this would be increasing the duration of time for which you continue to have funds at risk, after the funded account traders actually get going.

My contention is that it could easily still work out profitable for you, overall, for two main reasons.

Firstly, it would attract a whole lot more people to try Combines (I might be one of them, myself, and I know I'm far from the only one), if people didn't feel that their available trading capital after being funded is limited to whatever they can make in 10 days, so you'd get a lot more participants. With the Combine pass-rate now being (what? 30%? I'm completely guessing, of course) the additional income would compensate for any potential losses arising from incurring additional risk from what I'm suggesting (maybe?).

Secondly, surely a significantly higher proportion of people would last longer with their funded accounts (rather than dropping out before withdrawing their first $5,000), because at the moment their effective starting-funds, based on only their first 10 days' profits, aren't really enough to be trading futures safely and with appropriate risk management? Which would surely earn the company its 20% profit-share on more traders than it does at the moment?

This might, therefore, be a way of increasing both the applicant numbers and the proportion of successful outcomes.

Obviously I'm not privy to your finances and corporate risk assessment, so I'm "guessing" of course, but I think the principle could be a valid one, even if my figures aren't quite right.

Happy New Year to TST, and good luck with your January policy/procedure amendments, whatever they turn out to be.

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  #880 (permalink)
Chicago, IL
 
Experience: Advanced
Platform: TSTrader, NinjaTrader...
Trading: ALL- Futures, Forex, Equities
 
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Posts: 246 since Feb 2013
Thanks: 57 given, 690 received



Tymbeline View Post
A question for @TopstepTrader, if I may?

It might be short notice to ask this, but would you consider, as part of your January 2017 "rule changes", extending the 10-day principle for funded accounts to 30 trading days?

I appreciate, of course, that looking at it superficially, this would be increasing the duration of time for which you continue to have funds at risk, after the funded account traders actually get going.

My contention is that it could easily still work out profitable for you, overall, for two main reasons.

Firstly, it would attract a whole lot more people to try Combines (I might be one of them, myself, and I know I'm far from the only one), if people didn't feel that their available trading capital after being funded is limited to whatever they can make in 10 days, so you'd get a lot more participants. With the Combine pass-rate now being (what? 30%? I'm completely guessing, of course) the additional income would compensate for any potential losses arising from incurring additional risk from what I'm suggesting (maybe?).

Secondly, surely a significantly higher proportion of people would last longer with their funded accounts (rather than dropping out before withdrawing their first $5,000), because at the moment their effective starting-funds, based on only their first 10 days' profits, aren't really enough to be trading futures safely and with appropriate risk management? Which would surely earn the company its 20% profit-share on more traders than it does at the moment?

This might, therefore, be a way of increasing both the applicant numbers and the proportion of successful outcomes.

Obviously I'm not privy to your finances and corporate risk assessment, so I'm "guessing" of course, but I think the principle could be a valid one, even if my figures aren't quite right.

Happy New Year to TST, and good luck with your January policy/procedure amendments, whatever they turn out to be.

Tymbeline - Thank you for the input. As to not spill the beans, we will have some really exciting news/updates in January pertaining to what you said above.

To the New Year and the 2017 markets!

Michael

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