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AN INSIGHT
TO DAY TRADING

LIVE ACCOUNT PROVIDERS – TOPSTEP REVIEW


MISSION

To provide a safe experience so traders can professionalize their passion.


ABOUT

TopStep is a US based company established in 2012 by Michael Patak and is the oldest funded account provider in this field. When Michael Patak started his career as a trader, he blew up three brokerage accounts before finally learning the keys of professional day trading and consistent performance. This inspired him to create a platform where traders can develop their skills while trading live accounts without making the same expensive mistake like him. Today, Michael Patak functions as CVO of the company and TopStep is led by Jay Rudman functioning as CEO.

As Michael figured out himself, trading requires a trading discipline and Topstep made his goal to provide a framework that suits this purpose. One approach here is their 2 step qualification process – the combine. In order to pass the combine, TopStep provides extensive coaching material through their digital coaching application as well as group coaching.


TopStep's digital performance coach, the “Coach T”, uses the trader's personal trading data in real-time to construct individual analytics helping the trader to make meaningful improvements to the existing trading strategy. Further, the application supports traders with their risk management suggesting adjustments based on their objective data. The “Coach T” aims to helps in building stronger habits and greater awareness along the daily routine.


In addition to their digital learning solution, Topstep offers group coaching sessions with their trading experts John Hoagland (Performance Coach), Dan Hodgman (Marketing Manager) and Mick Ieronimo (Risk Manager) to learn the fundamentals of trading. The coaching sessions include daily group meetings and markets analysis as well as a free Combine reset each month giving the opportunity to exchange with like-minded traders in a professional environment.

Topstep started their business with futures accounts only but has added CFD accounts in the meanwhile as well.


ACCOUNT TYPES

Topstep offers 3 different account types ranging from $50k to $150k account (futures accounts).


QUALIFICATION PROCESS

Topstep has implemented a 2 step qualification process with their funded trading accounts. In the first step traders are asked to trade a minimum of 5 days while meeting their account’s profit target and respecting the given account guidelines with regard the to daily loss limit, maximum drawdown and maximum position size.


Once the first step has been passed successfully, the trader moves on to the second step of the qualification process where the same profit targets needs to be reached again. The rules with regards to the trading account remain the same. However, this time there are no minimum trading days but there is now a consistency target in place which defines the best trading day must be 40% below the total profits made. Moreover, a scaling plan needs to be followed in the second step of the qualification. As the trader generates or loses equity, the buying power will increase or decrease based on the end of day P&L.


Also, trades are not allowed to hold positions during major economic events which refers to the regular economic calendar. A position must be closed at latest one minute before the event and are allowed to be opened one minute after the event again.


In both qualification steps TopStep does not allow to hold trades over night and traders must close their trades at the end of the trading day.


Live Account

Once the Combine has been passed, traders can choose between a Funded Account and a Pro Account.


Funded Account

The Funded Account is a live trading account which will be made available 7-10 business days after passing the Combine. It maintains all account parameters from step 2 of the Trading Combine. The trader receives 100% of the first $5,000 in profit, thereafter, the profit split is 80/20 where the trader receives 80% of the withdrawals. Also, traders are charged $132 per exchange and month for the data feed.


Pro Account

The Pro Account is a live trading account which will be made available 1-2 business days after passing the Combine. It also maintains all account parameters from step 2 of the Combine, however, the trader receives 100% of the first $10,000 in profit, thereafter, the profit split is 80/20. Traders are not charged for data feed fees, however, they are automatically transferred to a Premium Account after reaching a profit if $5000.


Premium Funded Account

The Premium Funded Account is a live trading account with a starting balance equal to the generated profits in the trader’s Pro Account. This account type starts automatically after the trader has met the Pro Account targets without breaking any rules. The trader receives 100% of the first $10,000 in profit which considers both the initial Pro Account and Premium Account. Thereafter, the profit split is 80/20 where the trader receives 80% of the withdrawals. Traders are charged $132 per exchange a month for the data feed and maintain their daily loss and drawdown limits with regards to their chosen account at the start as well as respect the scaling plan.


OPINION

The company is the oldest player in this area and surely enjoys the most trusted brand name in the field of funded trading accounts. However, the Topstep review reveals traders pay that trust with comparably high account fees while having a selection of three different account sizes only. Moreover, traders have to pass two evaluation steps that takes a total of 15 days minimum which seems to be outdated when comparing with their competitors where lower boundaries have defined the new standard. Their live accounts are attached to strict rules making it difficult for a trader to apply their individual trading approach. TopStep does not have protection feature in place that the account gets closed when exceeding the allowed lot sizes even my mistake. Further, qualified traders are charged $132 per exchange which sums up to $528 a month when subscribing to all major CME exchanges.


On the other hand, Topstep provides a unique digital coach and also has mentors as well as group meetings available helping their traders to improve and succeed which clearly illustrates a help for aspiring traders.


In my opinion, having coaching options available is reasonable to have, however, an independent futures day trading course may illustrate a more unbiased option. Also, their complicated qualification steps and subsequent high monthly fees are outdated and traders may be find more attractive opportunities with alternative account providers like Leeloo, OneUp or UProfit.