TopStepTrader is a legitimate trading opportunity. The company allowed me to verify every aspect of the business; they do, in fact provide a huge amount of funding to aspiring traders. The trading combine is not easy to pass, but those that pass become elite in their field. This company is growing fast and adding an average of one new funded trader, that I was able to verify, each trading day. I would consider this company to be global game changer on how the opportunities of capitalism are distributed. These are very serious people, offering a very serious opportunity to anyone willing to work hard and play by the rules. 100% legitimate.
User Review( votes)
Today’s Review is TopStepTrader
Thanks for reading this review, and I want to be totally upfront with my audience, TopStepTrader contacted me three months ago and requested that I review their trading product, in addition to writing my review, they also inquired about advertising on TradingSchools.Org. I agreed, but only after I had thoroughly investigated and vetted the opportunity. The following review was written over a several day span, however it took me nearly two months of researching every detail of the company.
To date, this will be only the second private party that I have allowed to advertise on my site. The first would be Google, and you can see those Google ads interspersed throughout the site. I have no control over the Google ads. The second advertiser will now be TopStepTrader. How much am I being paid? To be completely honest, I am not sure. I never even bothered to ask. The profit motive for TradingSchools.Org has always been my secondary motive. My primary concern has always been to not allow my reviews to be contaminated, polluted, or in any way influenced by a commercial advertising agreement. Some readers certainly do have the right to feel cynical about this review, however, I would hope that readers judge this company on the evidence that I was able to collect.
Protecting the relationship with my readers has always been the top priority. Sometimes I give a positive review and I get duped, or the vendor’s performance takes a dump, as always I apologize for leading any readers to losses. Many have. Conversely, sometimes I write bad reviews about vendors, and I later learn that the vendor is actually a decent person offering a decent product. I always attempt to clean that up, apologize, and give credit where credit is due. Lets jump into the review.
TopStepTrader Complete Transparency and Open Access
Several months ago, when TopStepTrader contacted me and requested a review, I was very open and honest with them in explaining that this review could very well backfire on them. I told them flatly that the vast majority of my reviews are highly critical and sometimes downright vicious towards many in the trading community. For too many years, far to many charlatans have been roaming free on the internet, offering all sorts of trading products. The vast majority are complete and total scams. In the pre internet days, we had regulatory bodies such as the FTC, SEC, and CFTC that did a pretty good job of putting the scammers out of business relatively quickly. However, during the past 10 years it appears that they have pretty much quite the fight and decided that attempting to regulate the internet is an exercise in futility.
Lets not be too hard on the regulators. Just imagine for a moment how simple it is to whip up a website offering a world of trading riches and then have that website listed, for free and with zero credibility, as a Ninja Trader Official Educator. Or a webinar on Online Trader Central (cesspool of fraud) where a trading educator can instantaneously pitch the fraud to thousands of naive traders. Just image a government regulator, getting up in the morning and having to figure out how to catch a scammer using multiple fake names, multiple fake websites, using servers spread out over the globe. I write about these frauds daily, believe me when I tell you…some of these frauds are downright hard to pin down. What does this have to do with TopStepTrader?
Before agreeing to do the review with TopStepTrader, I told them upfront that I was highly suspicious of their model of allowing people to trade on a simulator for monthly fee, all in the shadowy hope that they could possible gain access to trading capital provided by the firm, at some later day. This type of model is quite literally a perfect storm for anyone looking to pull off a fraud. In fact, I had already sent TopStepTrader a list of a dozen other shady companies that had pulled their website down from the internet, after they found me snooping around and asking tough questions. All of these companies offering the same BS model of allowing a person to trade on a Ninja Trader simulator, with the implied hope of later gaining access to firm capital. You can read a couple of reviews of these scammers with this review and this review.
The bottom line…I wanted complete and total transparency from the company. No line of questioning was off the table. I wanted to see everything. Some things, such as account balances for the entire fund as well as figures such as profitability were available, but I agreed not to publish. To my surprise, TopStepTrader decided to simply give me whatever I wanted, nothing was off the table.
The attitude of TopStepTrader is that they wanted me to write the most highly credible, thorough and honest review as possible, and that they wanted the review to be used as a juxtaposition against the various other companies now attempting to copy their business model. The biggest problem that TopStepTrader is now having are the fly by night copycat websites popping up overnight, with highly credible looking websites, but are nothing more than a front to execute a fraud of collecting monthly fee’s and never actually providing any company funds to traders seeking genuine opportunity. They are concerned that this influx of fraud is going to tarnish the overall business model. I agreed to write the review only if I was given complete and total access, which they did.
Some readers might have read to this point and might be confused as to what exactly is TopStepTrader. In a nutshell, TopStepTrader is at its heart and core…an investment fund named Patek Partners. The investment fund is like any other investment fund, in that they want to earn as much profit as possible for the investors. Typically, investment funds usually have a manager, or group of managers that decide what to invest in. However, the owner and founding partner of Patak Partners and TopStepTrader wanted to try something different. The returns from the investment fund are generated by actual traders that have passed the TopStepTrader trading combine. This is crowd sourcing on steroids.
Mike Patak, the company founder and owner had been a long time trader at the Chicago Board of Trade and the Chicago Mercantile Exchange, and he wanted to design TopStepTrader to function comparatively to how many private traders gained funding at the Chicago Mercantile Exchange or the Chicago Board Of Trade. The old school method, was for the aspiring trader to arrive at the exchanges in Chicago with only a small stake of trading capital, and then attempt to trade that small stake into a track record of successes that others could see. Once the track record of success was established, there was an unofficial and unorthodox system that traders would navigate in order to gain access to additional capital from other traders, or investors. Much of the business of funding independent traders was a very informal process of people meeting each other and sharing trading records of success or failure.
For many years, this was the primary way that many traders got their start in the business of professional futures speculation. However, as the business shifted away from the pits and onto electronic exchanges, the old order was broken. The relevant players could no longer be found in the trading pits, or in the hallways, upstairs offices, the pass through’s of the exchanges, or in the local restaurants and the local watering holes in which the major players would haunt and conduct informal business arrangements. There was no longer any reason to live in Chicago, with the miserable winters. The business of trading futures then began to decentralize and disperse and reemerge in places with better weather, places like California and Florida. And the backgrounds of the people entering the business for the first time also went through a drastic change. The businesses specializing in speculating on electronic exchanges now wanted people with specific skill sets, like PhD’s in computer science, scientists in math and physics, theoretical statisticians, etc.
The era of the trading pits ended in the 2000’s. In retrospect, and with a little bit of time and reflection, we can now see things much clearer. We can now see who gained the most and lost the most in terms of economic impact. By and large, the biggest losers were the small speculators, the small guy that came to Chicago with nothing more than a dream in his heart to become a millionaire. Through cunning, risk, and effort, to carve out his own piece of the purest form of American capitalism. The trading pits, where millionaires were printed daily. Where money sloshed about in a sea of speculation, fear and greed, desperation and inspiration. A place where the little guy, if he were lucky, tough and smart, could position himself into that massive flow of money…and hopefully emerge a millionaire. Of course, the odds have always been thin and very few actually realized this dream, but the dream was attainable.
In speaking with Mike Patak, and reading everything that I could find on him, I began to realize his dream. Mike used to be one of those desperate, hungry, risk taking characters you would see in the trading pits, wildly gesticulating his arms in hopes of scraping out of living. He used to be one of those guys that needed to access capital, he understands the frustration of having to prove ones-self and also having to market himself to prospective financial backers. He first hand watched as the liquidity began to dry up and the trading floors began to decay and die. He felt what it was like to lose his financial backers, and watch his business of being a pit trader simply die away.
Mike had a crazy dream. Back in 2010, he was one of the first to come up with the zany idea of allowing anyone with an internet connection, located anywhere in the world to experience electronic trading with a bonafide offer for funding. His attitude was, if they can get on the internet and show me profit on a simulator, then I will provide the funding. He could care less if the person was young or old, smart or stupid, educated or uneducated, the only thing that mattered was whether the person could get onto a computer and prove themselves successful. He had no mentorships to sell, no indicator packages, no live trading room, no education of any sort was required…he wasn’t interested in any of that crap, he only wanted people that had the sheer will, audacity, personal motivation and grit to get onto the trading screen and show him success. He didn’t even care if that person spoke a word of English because money has no official language. He just wanted those with pure grit, the type of person that made it in the trading pits.
When Mike Patak started the company in 2009, at that point in his trading career, he had already spent 10 years trading in the pits. All of those years of trading afforded him a model of what a truly successful trader looked like. What were the characteristics, how much profit did they average each day, what types of draw downs did the best traders in the pits usually encounter? In short, Mike Patak knows exactly what success looks like. He has seen thousands of people come and go, the ones that stick around all seemed to exhibit comparative performance characteristics. Why is this important?
This is important because the very model of the TopStepTrader combine was created to produce traders that exhibited the exact qualities needed to insure long time success. When a person passes the combine, he would be considered one of the elite. One of the guys that made the markets pay them, consistently, year after year.
Yes, the combine is difficult to pass. But once a trader has been broken into the mold, then Patak Partners knows that they have a person that is going to succeed over the long haul, and the investment fund that backs the trader will continue to grow and prosper.
The Rate Of Success – 18.79%
I am sure that everyone is extremely curious about the rate of success. What is the percentage of people that enter the trading combine, and then exit the combine by meeting the minimum performance numbers? How many people, in total have shown the right stuff and gotten through the combine and been awarded the trading capital from Patak Partners? The magic number, which I was able to verify is 18.79%. For every 100 people that enter the combine, roughly 19 people on average make it.
The average velocity of funded traders is currently one new funded trader each day. For the first half 2015, there have been 161 funded traders added to existing roster of traders from prior years. How much funding does each combine graduate receive to trade? This depends on the level of the combine that the trader passed. From the numbers that were presented to me, the distribution was all over the place. In my opinion, the distribution of amounts that have been awarded are not nearly as important as being able to verify that TopStepTrader does in fact award traders and keep their promises. From everything that I witnessed, in most cases they even gave many marginal traders a pass and allowed them access to firm capital.
The Rate Of Failure – 50%
After a person has passed the combine and been awarded firm capital, how many people failed with real money accounts? About 50%. This means that at some point, TopStepTrader had to pull the plug and stop the bleeding. What happens to these traders? The firm then places the trader back into the combine, trading on a simulator. Once the trader gets back on track, then they flip on the switch and the trades are immediately executed live.
In speaking with TopStepTrader, they have a very optimistic view of people that have to revisit the combine. Their attitude is that the funded traders are like professional athletes that need to be constantly improving and a sit in the penalty box of the combine allows the trader to reassess what they are doing wrong. There are a multitude of reasons why traders screw up, from speaking with many of the funded traders that had multiple trips back to the combine, the number one reason was allowing losing trades to run against them, not willing to take losses. Another common reason is that many ventured into markets where they had no experience. They went looking for action.
Once such trader that I spoke with had passed the combine trading the ES futures. For approximately 6 months he continued trading his live account on ES futures. His profits were steady, but not spectacular. And then he went looking for volatility, he found the crude oil market, with its wild daily swings. He thought that he could take the same proven money making patterns in the ES and apply them to crude oil. Everything was going fine until he discovered something called an inventory report. Trading into an inventory report for crude oil is like attempting to jump a motorcycle across two tall buildings, and in between these buildings is a gigantic swimming pool filled with rattle snakes. This trader found out in one afternoon what it means to have his lunch eaten and then be stuffed into a garbage can by the local bully. The experience taught him something, stick with what you know, wait for opportunities and only take what the market is willing to give. Long story short, in spite of his multiple failures, he has been failure free for the past 8 months. Month after month, pulling out profits.
Speaking With Combine Graduates
One of the great things about TopStepTrader giving me free and open access to everything, was being able to interact and speak with funded traders from all over the globe. It really gave me a different perspective on how we define success. We typically like to define trading success as plus or minus a certain amount of money. But for some of these graduates, getting this chance to become a full time trader was truly an unattainable dream.
One guy I spoke with had spent nearly his entire life living in a small town with very limited economic opportunities. He is married and has four kids to feed. His day job is changing tires on industrial vehicles. Every single penny that he earns on his day job goes towards feeding those kids. There was simply no way that he would of been able to raise thousands of dollars to try his hand at futures speculation. However, he never gave up hope. He read every single book on technical analysis that he could get his hands on. He even self taught himself statistics and learned to program basic strategies. He poured his life into learning the markets, but he had no money to trade. After he found TopStepTrader, he took a chance and maxed out his credit cards for the chance at the combine. Finally, after three months of failure, he managed to pass and became a funded trader. When he explained to me how he felt about passing and becoming a funded trader, it literally brought tears to my eyes. Here was a guy stuck in a small town, middle aged and going nowhere. But this stupid combine had literally changed his life. How has it changed his life? Well, his goals are actually pretty modest. While you and I are probably thinking about a new Ferrari and living in Hawaii, this guy just wanted to be able to earn enough money so that he could keep the air conditioner on ALL summer. And he wanted the extra money so that his daughters would no longer have to share clothing. He wanted to feed them better food. I was amazed at what he was telling me. What is even crazier is that every morning before he heads off to his day job, he first stops at the local library which has the fastest internet in town and with his cheap laptop computer, he gets onto that trading screen and attempts to grind out profits. On one day in particular, the library was closed, and so he sat out in the parking lot of the library with his laptop. He managed to earn $300 in an hour. Which is twice what he earns in a single day, working labor, full time. Very inspiring what even the most modest person can achieve when opportunity meets preparation.
I have nine other interviews. Other graduates that have just as inspiring stories. Stuff that tugs at your heart and makes you really question how we define success. I could write another 10,000 words about these guys gals, all inspiring. But this review is already going way too long and I am starting to ramble.
At least once a month, I am going to be writing a profile on the funded traders at TopStepTrader. Amazing stuff folks. Some of these guys stories are simply amazing stories to tell. I even have one interview with a guy that has made it big time. Big, big money that most of us only dream about. Another about a young lady from the most unlikeliest of locales.
Wrapping Things Up
There is so much more to tell about this company. I did a horrible job with this review. I am sure, that at some point in the near future, someone is going to write a book or shoot a film about this company. There is so much there, there. Its an amazing story about a company that has literally scooped up the ashes of the now shuddered trading pits on LaSalle Street in Chicago and figured out a way to make something useful and vibrant. Mike Patak figured out a way to take the very essence of what trading opportunity meant to so many, on a local level, and then introduced it to the world.
Its pretty obvious that I am upbeat about this company. This is a high quality prop firm, offering real opportunity.
One Final Note
I wanted to address an urban legend regarding the success and failure rates of retail traders. One of my readers spent over 20 years at Man Financial, which at one time was the largest retail commodity and futures brokerage in the world. His specific job was to manage the day to day activities of over 2000 registered representatives. Specifically, he had access to thousands upon thousands of retail futures trading accounts. At a moments notice, he could pull up a spreadsheet and tell you how many retail accounts were profitable and how many where not profitable. According to him, the urban legend that only 5% of retail trading accounts are consistently profitable is grossly over exaggerated. In his experience, the consistent money was made by less than 1% of all accounts. The single largest determiner of trading success? If the retail account was being managed by someone that had also worked in the trading pits. This was the single greatest clue to success or failure, if the person had real world experience in negotiating the trading pits.
With this in mind, consider the difficulty of passing the TopStepTrading program. The program was designed from the ground up, to emulate the successful pit trader. Some may say that the passing rate of only 18.79% proves that this is not a good opportunity, but I would counter by saying that new traders that are forced to conform to the rules set within the combine far outperform the average retail trader. These rules are meant to shape, meant to mold the trader into what has been proven to work.
Thank for reading and don’t forget to leave your comments below.