Money

Why I’m Starting A TopStep Trader Combine – Jamie Murray – Medium

I’ve know about TopStep Trader pretty much since they started offering traders the opportunity to take their “Combine”, an assessed period of sim trading, with the prospect of being funded at the end. Since then, they’ve become hugely popular. Some have said the combines are just a way to bring in subscription income, others have championed the service they offer. So far, I’ve stayed on the side-lines, until now.

If for some reason you have an interest in trading, but don’t know about Topstep, it’s probably easier to check out their youtube page here:

Who Are TopStep Trader?

As far as trading resources go, TopStep offer a host of things, but what most people are interested in is the Combines, or the monthly subscription service that lets you essentially have your sim trading reviewed (and subject to you keeping to the stated risk parameters and trading rules) and then progress into potentially becoming a TopStep funded trader, trading their money.

The internet is awash with information about TopStep, so if you really don’t know much more, I’d go and do some research, head over to their website, or futures.io and you’ll be able to find a host of information on the services they provide, and crucially the experiences of those that have taken the combine. Like anything online however, I would caution you to take every experience within the context of potentially biases and agendas. So instead of contributing too much more to the noise on the internet, lets get to what I want to discuss here — why I’ve decided to take the combine.

Why Now?

As I say, I’ve known about TST for some time, they are one of a number of services that offer trading hopefuls the ability to actually become a funded trader, trading real money, potentially without much experience. Whilst I’m aware of other services, some of which have a slightly different model, I think TST are still probably king of the hill when it comes to this way of trying out to be a trader, although personally, I’m not really a fan of the try out mentality.

With TST, you pay a monthly fee, pick a sim account size and spend the next period of months trying to stick to a number of trading rules and risk parameters in order to pass the combine and enter the next stage of consideration for funding. The point here is that it offers the ability to undergo assessment first, without a prior track record. I think it’s this point that is crucial for a number of traders who look to take the combine — whilst many of the candidates (and I’m presuming most of those that actually end up being funded) have been in the ring for some time, a lot of newer hopefuls probably underestimate the challenges of becoming a consistent trader to the extent that is required in order to actually trade other peoples money.

The historical alternative to this approach has been to go out, get a track record and then put yourself in front of trading houses, and whilst I haven’t had the aspiration really ever to trade other peoples money, this approach of getting a track record in order to then build my account, is definitely where my preference has been before.

So what’s changed? Well a number of things. Firstly, I’ve been trying for too long with sporadic periods of trading, with meagre funds to try and build consistency. If you don’t at least have some sort of trading routine, a preferred market and at least one bread and butter trade, I think it’s very hard to make progress. I’ve had big periods away from the market, and every time I’ve come back I’ve had to reset. This time, now that I’ve managed to build trading into life’s other challenges, things seem more manageable. The problem however is always funds.

Go Fund Me

No, I’m not launching a campaign to try and raise a trading account, instead quite the opposite. Despite actually having the funds together that would support a small (contextually very small) account, we are diverting them to my wife’s business. Starting our family business is definably (although hopefully not always) a priority over trading, so the capital at risk that would realistically get drawn down significantly whilst grinding out consistency with trading is much better put towards the business for now. So I’m back at square one — and that’s where the combine comes in.

I’m of the opinion that you have to be realistic going into things like a trading combine on your chances of coming out the other side a success, and I do not necessary see a funding decision as the definition of that success. Sure, I’d love to kill it over the next 30 days and get a nice phone call to say I’m through to the next stage, but given my experience, lack of recent activity in the market and a trading strategy that is just about sea worthy, it’s probably not on the cards. That said, what the combine allows me to do is practice. It allows me to stick to imposed rules, observe and participate in the market in a way that I think will definitely help.

Also, a lot of it comes down to access. I’ve been doing a lot of observation work lately, and it seems to be paying off. It’s pretty hard to observe however when you come to the end of a two week trading demo and your feed dies. So a big part of it for me is just having access to the market.

The Objective

So what am I looking to achieve over the next month or so? Well first and foremost I’m looking to observe. I want to really focus on getting to grips with how my chosen market moves during the period of the day I have to sit down and trade, and see if I can put some meat on the bones of the strategy I was working on back in March.

As far as market participation goes, I’m trying to focus on really understanding what I want to see take place, and once in the market make a swift exit if I don’t see the follow through I need. I think this, with practiced trade selection will help weed out some poor decisions and increase my win average, which is important for the way I like to trade.

In terms of what I want to achieve at the end of the combine, first and foremost I want to stay within the risk limits. If I come out the other end and I’m not a candidate for funding, I’m ok with that, if I’m not a candidate because I busted risk limits then that is a big problem for me and something I really don’t want to see happen. Ideally, I’d like to finish up the month having stayed inside the risk limit, having a positive trend in win rate but most likely missing the profit target.

Why go into the combine thinking I’ll miss the profit target I hear you ask? Well primarily when you look at the tick to commission ratio with the ES particularly, and the win rate required for successful scalping, in order to hit the profit target on a single lot you need to take a lot of trades, that of course increases your exposure to the down side, so I think I’d rather keep the trade frequency lower in order to make the most of the combine and risk limit.

I guess what I’m saying is I’m trying for endurance.

Some Side Notes

So firstly, I obviously don’t have any association with TopStep, I like to write, and I like to journal my experiences in trading, so that’s the only reason I’m writing this. I will be journaling the experience, both for my own benefit but also for anyone else who is in a similar position to me with similar trading interests and aspirations.

Secondly, it’s worth noting some points with regard to the model that TST uses. It would be remiss to not talk about the fact that TST has come under some criticism online for the way the combines run, and some people have pointed out that they perhaps rely too much on the income from combines rather than genuinely being on the look out for talented traders. Personally, I’m not sure I buy it. Obviously time will tell with my own experience but what I think gets forgotten is that the people behind TST have a vast amount of experience, and they are offering trading hopefuls (complete strangers) the potential to trade their investors money. Given this fact alone I’d expect a very rigid rule structure and a very taxing assessment process to get through.

It’s also worth noting that they have been receptive to traders feedback on rules and the way the combines work, and they seem at least from where I’m sat to be acted on that feedback. Yes, of course the trading combine income makes good business sense, and possible even acts as a hedge to losses incurred by funded traders. At the end of the day, for some one like me who doesn’t have access to a decent trading account, the fee is good value for the access I get to the market. Just my opinion of course.

Passing a combine seems to be the holy grail for a lot of traders, and whilst I can understand why, I think the deeper value is in being able to deepen our foundations of trading. Whilst I think executing is always going to have that feeling of uncertainty no matter how experienced you get, being able to do it knowing you’ve seen that market behaviour a thousand times before, and act accordingly is really what I want to be working towards.

Journalytix

It’s no secret I’m a big fan of Jigsaw Trading Tools. Since adopting them and moving away from a more technically based way of trading I’ve understood markets much, much better. I value the simplicity of the software and also the philosophy of Jigsaw’s approach to providing the services they do for traders.

Again, I’m not affiliated with Jigsaw other than being a happy customer (why do I feel I have to say that with everything in this day and age?) but I do think it’s worth talking briefly about how I plan to incorporate their journaling software Journalytix into the combine.

Journalytix is powerful to say the least. I’ve worked with a variety of journaling tools in the past and always ditched them because it took too much time and effort to journal properly, maybe that’s my failing over the software, but it’s always felt too clunky. Now, I’ve subscribed to the full journlytix service and will have the ability to journal as I go as well as work with their stats afterwards which already proved beneficial on my recent round of trading drills.

Going into this combine I’ve a sound plan of what I want to achieve and a robust set up for participating in the market. I’m looking forward to consistently working at it on a daily basis, and I look forward to documenting it here. Hopefully, when I come out the other end, I’ll be a few steps closer to becoming a long term profitable futures trader.


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