If you don’t have the funds to open a brokerage account or you simply just don’t want to risk your own capital trading. Using a funded trading account is an excellent option.
There are several funded trading account options available. One of the best, well known and respected is TopStepTrader. In this post I will provide a quick and simple outline of how to Sign up for a TopStepTrader account and how to get started with TopStep Trader.
Why I like TopStepTrader
Trading a funded trading account offers consistent traders the opportunity to trade the futures almost risk free.
This is a huge benefit and something that most traders from beginner to intermediate level should seriously consider. I encourage any trader struggling to find consistency to never risk their own capital until they can prove they can trade.
TopStepTrader rules ensure traders prove their consistency in the markets and then offers the opportunity to trade in a live environment also risk free.
If you’re battling with the psychological aspects of trading this approach offers a more graduated approach in your trading journey.
Qualifying for a TopStepTrader funded account
Before TopStepTrader is going to give you funds to trade live. Understandable you need to prove you can trade.
TopStepTrader has a 2 step evaluation process called the ‘Trading Combine’ that all traders must pass to earn a funded account.
These steps are:
- Step 1: Prove you can trade
- Step 2: Manage Risk
What is the TopStepTrader Trading Combine
The Trading Combine is a real time simulated account where your trading performance is being evaluated that must be passed to advance to a funded account.
Trading Combine Rules for Step 1: Prove you can trade
To pass ‘The trading Combine step 1’ traders must achieve specific ‘targets’ whilst not breaking the trading combine ‘rules’. These rules focus on two main themes; risk management and consistency.
The exact amounts relating to these rules is specific to the size of the trading combine account you are in.
These rules and targets are:
The Trading Combine Step 1 Rule 1: Daily Loss limit
At any stage during the trading day you hit your daily loss limit your account will become ineligible.
This is the most common rule broken by TopStepTrader applicants. So if at any stage you are get close to your daily limit close out your position and live to trade another day!
The Trading Combine Step 1 Rule 2: Trailing Max Drawdown
This is a key metric for measuring consistency and profitablity.
This rule is best explained with the help of a diagram:
If at any stage your account is drawn down from its high by the ‘Trailing Max Drawdown’ amount your account will become ineligible.
The Trailing Maximum Drawdown represents a maximum amount that your account can drawdown before it becomes ineligible.
As the name suggests the Trailing Maximum Drawdown trails your account balance HIGH. Refer to diagram days 0-2.
If you give a little back to the market and your balance drops. The Trailing Maximum drawdown remains at the account high level. Refer to diagram days 2-3.
Once you have accumulated profits greater than or equal to the trailing max drawdown the Trailing Max Drawdown remain at the the initial account balance. Refer to diagram days 4-10.
Your trailing max drawdown is updated at the end of the trading day and is displayed on your dashboard under ‘Rules’.
The Trading Combine Step 1 Rule 3: Maximum Position Size
This is the maximum number of contracts that can be entered at one time across all instruments you are trading.
There is no rule violation relating the number of contracts simply a restriction placed by the platform.
A good rule of thumb here is to look at trading smaller than the number contracts available. Remember you are looking to build profits consistently.
The Trading Combine Step 1 Rule 4: Trade permitted Products during permitted times
All product positions must be closed prior to 3.10PM (CT). Some products close prior to this time so its a good idea to get familar with the product you are trading. You can then restart trading at 5.00PM (CT).
Here is a full list of products that can be traded in The Trading Combine. Currently only CME products are available with the Trading Combine.
The Trading Combine Step 1 Target 1: Minimum Number of trading Days
Topsteptrader wants to see that you can trade consistently and not just get lucky. You must trade at least 5 days where an order is entered and exited. They don’t need to be consecutive days.
There is no maximum limit to complete the trading combine step 2.
The Trading Combine Step 1 Target 2: Profit Target
This is the key metric. Once you have reached the profit target, traded the minimum number of trading days and not made a rule violation. You have been successful at completing step 1 of the evaluation process.
Trading Combine Rules for Step 2: Manage Risk
To pass ‘The trading Combine Step 2’ traders must achieve specific ‘targets’ whilst not breaking the trading combine ‘rules’. Just like step 1 these rules focus on two main themes; risk management and consistency.
these rules and targets are additional to those mentioned in ‘The trading Combine Step 2’.
The Trading Combine Step 2 Rule 1: Weekly Loss Limit
The weekly loss limit is the maximum amount you can lose at any point in the calendar week – Sunday night through to the close on Friday.
The weekly loss limit is the same amount as the daily loss limit BUT is factored on a weekly basis.
The weekly loss limit is eliminated once the trailing maximum drawdown reaches the initial balance.
The weekly loss limit in calculated off the prior weeks ending balance. Your weekly loss limit can be found your dashboard under ‘Rules’.
The Trading Combine Step 2 Rule 2: Flat for Product Specific Major Economic Releases.
You must be flat 1 minute before and until 1 minute after product specific major economic releases.
Here is a full list of major economic releases here or in the weekly kick off email that goes out each sunday.
The Trading Combine Step 2 Rule 3: Scaling Plan
As your account balance increases or decreases your buying power will also increase or decrease based on your end of day P/L.
Each Trading Combine account has a specific scaling plan. The scaling plan is a list of the number of contracts you MAY trade based on your balance.
In the case of the scaling plan your platform will not restrict the number of contracts you can trade. You must be mindful of the available leverage based on your scaling plan. If you exceed the maximum number of lots your account will become ineligible.
The number of contracts available to trade is updated at the end of the trading day that will be available for entirety of the following day. It can be found in your dashboard under ‘Rules’.
Note: These are your MAX lot sizes you can continue to trade a single contract if you choose.
The Trading Combine Step 2 Target : Minimum Number of trading Days
The profit targets in Step 2 of the Trading Combine remain the same as step 1. Only the minimum number of trading days are adjusted.
You must trade at least 10 days where an order is entered and exited. Just like in step 1 of the Trading Combine these don’t need to be consecutive days.
There is no maximum limit to complete the trading combine step 2.
Once you have successfully complete Step 1 and Step 2 of the Trading Combine you have qualified for a funded account!
How to get started with a TopStep Trader
The first thing you’re going to want to do to get started is sign up for an account:
- To get started go to the TopStepTrader Sign up page. Complete the fields and click ‘Start Trading’.
- Check your email for your account ‘activation’ link and you’ll be taken through the TopStepTrader on board process.
- Select which way to get started. Either a Start a free 14 day trial or Start the evaluation to qualify for a funded account. Likely your going to want to start the evaluation. So click ‘Start My Trading Combine’.
How to Start a Trading Combine with Topsteptrader
Once you have signed up for a TopStepTrader account and followed the prompts to ‘Start My Trading Combine’.
The first thing you need to do is select your ‘Account Size’ you want to qualify for. My suggestion is to initially sign up for the minimum account with smallest ‘Profit Target’.
What Trading platforms are supported with TopStepTrader
You will then be presented with the Trading platform options. TopStepTrader has recently expanded their platform selection and now have a great range of platforms to choose from: including Ninjatrader and Sierra Chart.
Heres the full List of supported platforms with TopStepTrader including data feeds and information relating to platform charges.
You’ll then be prompted to the ‘Review Details’ Page for payment options to get started.
Once your payment is processed your account is ready. Return to your dashboard and you’ll find your ‘trade report’ and ‘equity curve’.
To start your trading combine simply ‘Launch’ your trading platform of choice within the permitted hours and start trading!
Good Luck with your trading Combine!
Sign up for a TopStepTrader account here and begin your evaluation for a funded trading account.