How does Trading combine work?
The Combine is a two-step trading exam; you need to meet profit goal requirements while following all the rules in each step. There are three different program sizes 50k, 100k, 150k.
Trading Combine Step 1:
Profit Target - profit amount that needs to be reached to advance to the second step of trader funding combine. You can take as long as you need to reach this goal and advance.
In the first step, you can trade maximum position size right away, either all in a single futures product or across multiple instruments if you would like. You do not have to use maximum leverage at all times and can trade as few as one contract.
Daily loss limit - your losses for a single day can not exceed the daily loss limit (open loss + trading commissions). If you exceed the maximum loss limit, you cannot qualify for the second step of the real time simulated accounts for trading and have the option to reset or start over.
Very important TopStep features END OF DAY drawdown, meaning the Drawdown does not trail until the trading day is complete. This is a significant advantage over loss limit trails opened and closed P&L intraday programs. Daily Drawdown is designed to preserve capital. Having a bad day in the markets happens to absolutely everyone.
Top Step Trader experienced traders behind the program feel it is important to have a daily loss limit. Walking away for the day when things aren't working is an important skill to develop. It is not uncommon for a trader who starts the day poorly to chase or make up losses, frequently by abandoning trading strategies and taking unnecessary risks.
Often, positions come back when taking on too much risk and leverage because the account is in the red, bad habits get reinforced. For the sake of new traders - we hope that they never have to experience the crushing feeling of giving up days, weeks, or career of gains and going into deep red because of a position that started with a single ill-advised contract entry.
With the Daily loss limit, especially new traders start to develop risk management and learn to walk away from bad days. Step 1 is pretty straightforward: start establishing good habits and building profits. Upon reaching the profit goals of the first step, you will be automatically advanced to Step 2 after the end of the day.
Trading Combine Step 2:
Step two builds on what was started in the first step seeking to learn more about what it takes to be a steady risk manager and profitable Trader.
In step two, you start with the same virtual balance as the first step. You have the same profit target of 3k, 6k, or $9000 based on your selected account size.
There is no longer a minimum required several days to trade or deadline. Can trade as long as necessary to achieve the profit objective. The funded account can be achieved in as little as three days. Traders have to ensure that no trading day in the second step accounts for more than 40% of the profits.
40% best day profit rule - measures traders' ability to manage risk and make repeated profits before heading into a live funded account. Topsteptrader team believes setting a daily earnings goal gets you in the mindset of a professional trader. It is not considered a rule violation if the best day exceeds 40%; the Trader has to keep Trading and accumulating profits until the best day accounts for less than 40% of profits.
Weekly Drawdown - maximum account trader is allowed to lose in a calendar week; this is another large loss prevention measure allowing traders to mentally recover from losses and give it another chance next week. Step 2 weekly loss limit is EOD - updated at the end of the trading day.
Economic Releases - TopStep requires traders in Step 2 to be flat for major economic releases. There is a calendar of major new releases provided and updated by the trading company. Having positions during the 1 minute before thru 1 minute after economic release is considered a rule violation. Significant market spikes can occur during FOMC meeting minutes or Crude Oil inventory releases.
It is best to learn to be flat for these events until further in Trading. Typically liquidity significantly dies up, and any stop losses can be magnified by very significant slippage. It is best to learn early on in a trading career to avoid having positions during very volatile and low liquidity situations.
Scaling Plan - you are advised and required not to use the full available leverage right away. TopStep team believes it is best to increase profits before upping the leverage. Therefore, the number of contracts available to trade is updated at the end of each day until the maximum allowed leverage is unlocked halfway to a profit goal.
Complete both steps within the rules, and congratulations! You are a TopStep Funded Trader! Funded traders have been paid out around $4,000,000 in profit sharing for 2021.
Thing to note: you can buy Trading combine with a credit card, however, you cannot fund a trading account with them.