Top Step Trader vs. One Up Trader
Today’s article is a good little piece of trader gossip. In the past couple of years, I have written various articles on the ‘hamster wheel’ known as Top Step Trader.
For those not familiar, Top Step Trader is a “fake” proprietary trading company where futures trading newbies pay hundreds of dollars each month to trade on a simulator.
Top Step Trader purports to offer funded trading accounts to whoever is lucky enough to escape the hampster wheel alive. Essentially, a trader must meet the minimum performance requirements in something called “the combine.” If they pass “the combine” then they are awarded a token funded trading account.
I put heavy emphasis on the word token. Why use the word token? Because the funded trading account is as small as a mouse’s ballsack and is usually snatched away quicker than a hungry dog will gobble up a piece of freshly barbecued meat.
The Top Step Trader funded accounts program is the ultimate gimmick. Where the newbie and the naive with no trading account, is encouraged to use a credit card to purchase access to a trading simulator. They get caught up in a ridiculous cycle of (usually) perpetual failure. Encouraged to keep spending hundreds of dollars each month at the elusive chance at winning the prize.
Yes, some folks actually are awarded a prize. The funded trading account. But in reality, the prize is about as valuable as a stuffed animal at a carnival. The truth is that masses of people throw money at this game, in hopes that the tiny little ring will somehow find the end of a bottle. And when it does, the carnival barkers at TopStep Trader send out a wave of marketing enthusiasm to highlight the lucky person. Sort of like winning the lottery. Yes, someone wins. But it won’t be you.
The Abysmal Failure Rate of Top Step Traders
How does TradingSchools.Org know the abysmal failure rate of the Top Step Trader funded trading program? TradingSchools.Org currently has about 90k monthly web visitors. That’s a lot of people. We rank page 1 for just about every single Google search term related to Top Step Trader. This puts us in a powerful position where we can tap into the mood of the audience. We can ask the audience questions about their experience with Top Step Trader.
And since we have no financial interest, unlike the hordes of affiliate marketers and trading guru’s pushing this TopStep Trader combine nonsense, we can say our true opinion.
On April 22, 2016 we published a public survey that attempted to query the ‘real’ performance statistics of people that had actually been hustled through the Top Step Trader hamster wheel. Top Step Trader does not publish any of this information (for good reason). The questions on everyone’s mind?:
- How many people have participated by purchasing a trading combine?
- How much money do people typically earn from funded trading accounts?
- How long do people usually last with a funded trading account?
- How much money is Top Step Trader making?
On June 13, 2016 we published the results of that survey.
In total, we received 163 respondents. We discovered the following:
- The average TopStep Trader spent $1,145 in combine/hamster wheel fees.
- 79% of participants were never able to “win” a funded trading account.
- Those that received a funded trading account averaged -$900 in earnings. In others words, even the winners were net losers.
What was even more shocking was the estimated net profit of TopStepTrader. All survey participants had spent over $186,000 in TopStep Trader combine fees. An incredible amount.
TradingSchools.Org took a closer look at the business model and discovered that nearly all of these ‘combine’ fees were pure profit for TopStep Trader. Our internal model has the gross profits at about 90%. Truly remarkable.
How much money has TopStep Trader earned from this business model? Though it’s hard to estimate, TradingSchools.Org interviewed several of the technology vendors that provide the services that make this machine function…we estimate that TopStep Trader is earning many multiple millions of dollars each year. Not bad for a business that is basically only letting people play on a futures trading simulator.
Adults playing a video game. So quaint.
The Real Reason For The Survey
When we published the results of the survey, it would appear that the article was a classic TradingSchools.Org ‘hit-piece’. A sort of ‘consumer warning’ that people should be aware of the terrible failure rate of anyone that is stupid enough to purchase one of these ridiculous ‘trading combines’.
However, this was not the primary reason. The primary reason was to stoke competition. To highlight the incredible profit potential that additional participants could possibly reap by copying the same business model.
The business model is here to stay. It’s not going anywhere. As distasteful and crappy the deal for the consumer, it still has the potential to have incredible benefits to the retail trader.
For instance, if the pool of monies that are collected from combine fees primarily went back to the traders…then the business model could possibly bloom into something very special. This might be overly idealistic. Perhaps I still believe in the goodness of mankind.
Anyway, my ultimate hope was that additional players would enter into this business model. To offer something comparable. This was the only way to tip the scales back into alignment. More competition equals a better deal for consumers. I was hoping it would happen quickly. It didn’t.
Collectively, potential new market participants would contact me. And they would ask me, “how can this even be legal?” or “nothing this profitable can be legal.” Of which, I would reply that TopStep Trader has been running this monopoly since 2010. Surely, if the model did not pass regulatory scrutiny, then the FTC or the CFTC would have shut it down. But it simply has not happened.
Sort of like online porn. When it first arrived on the internet, collectively most people thought that the FTC would crack down. But they never did.
The First “Real” Competitor Emerges
On March 23, 2016 TradingSchools.Org posted a review about the first ‘real’ competitor to TopStep Trader. The company was named MES Capital.
Essentially, MES Capital began offering a similar opportunity as TopStep Trader. However, MES Capital was not charging any ‘combine fees’. In speaking with the founders of MES Capital, they explained that they were “just looking for some good traders that could trade their personal capital.”
MES Capital was using the exact same trading simulator as TopStep Trader. The simulator is provided by Rithmic and is commercially available to anyone willing to pay a fee. Nothing special here. An off-the-shelf piece of technology that has been in use for decades.
During the remainder of 2016, TradingSchools.Org spoke with various individuals that had been funded by MES Capital. We received no complaints from persons that were able to pass the testing parameters and received a funded trading account.
However, we did receive gripes from persons that had “traded profitably” during the testing phase, and yet were not able to receive a funded trading account. They did not understand why.
TradingSchools.Org researched the question as to why some were being funded, and some were not being funded. MES Capital did not have any published prerequisite or definable benchmark that a person must achieve in order to be awarded a funded trading account. Our best guess is that MES Capital simply ran out of funds to spread around.
Truth be told, most retail traders lose. Although the business model of not charging a testing fee seems like a generous and fair business model, in actuality, it is probably a losing endeavor.
TradingSchools.Org does not have a problem with the business model. We have a problem with how much TopStep Trader is skimming from the combine pool. A 90% profit
margin is fucking robbery. It’s unconscionable. This is what happens when you have a monopoly. It’s the very definition of extreme greed.
MES Capital transforms into One Up Trader
In the early part of 2017, TradingSchools.Org began to hear rumblings from insiders that MES Capital would be changing their business model. That they would begin charging a fee to individuals, similar to the TopStep Trader business model.
Although readers are probably already ‘poo-pooing’ the idea of yet another TopStep Trader business model, I actually applaud the idea. Finally, a new competitor is entering the scene. The owners of MES Captial understood their limitations and also understood the fat profit margins being earned by TopStep Trader. MES Capital rebranded their name to One Up Trader and decided to offer a better deal for consumers.
How much of a better deal? Much better. They addressed some of the most egregious practices of TopStep Trader. I won’t go into the specifics, but the business model of OneUp Trader is now attempting to offer a better deal to consumers.
In May 2017, OneUp Trader officially launched.
The reaction from Top Step Trader
How did TopStep Trader react to a new competitor? Did TopStep Trader reflect on the reasons why a new competitor entered the marketplace?
The reaction from TopStep Trader has been in my opinion vicious, ugly, petty, and vindictive. They filed a lawsuit that is attempting to bully One Up Trader into legal submission. The lawsuit is pure folly. The legal basis for the lawsuit is ripped straight from the playbook of a monopolistic bully. Trying to kill off a competitor, while it is still a baby in the crib.
Consumers should be outraged. The legal attack on One Up Trader is more than the petty argument of a couple of ‘rich guys’. Make no mistake, this is about maintaining a monopoly, about keeping a stranglehold on consumer choice. Its an attempt to bludgeon not only free and fair competition but also an attempt to keep you confined within a narrow box of lesser choices. It is outrageous. I have included a copy of the legal filing below:TopStep Trader vs OneUp Trader
If you took the time to read this…essentially, TopStep Trader is arguing the following:
- They have a registered patent for the Rithmic trading simulator. They don’t.
- That they are the originators of the concept of using a simulator to evaluate trader performance. Total bullshit.
- That any company offering a service, even comparatively, is an infringement of their proprietary method for ripping people off.
- That anyone that visits the TopStep Trader website is voluntarily consenting to never be a competitor of TopStep Trader.
Imagine for a moment, you visit your local McDonalds for a hamburger. It’s a delicious hamburger. And so you go home and tell your wife that you want to open a hamburger restaurant. But you want to add an extra beef patty. You decide to name your hamburger ‘The Big Meaty’. You believe your hamburger will sell better than the Big Mac.
And so you plow your life savings into this new restaurant. About a week later, you receive a letter from a douche bag lawyer in Chicago that demands that you immediately shut down your restaurant. That you are stealing the concept of the hamburger from McDonald’s. And that since you visited McDonald’s, you inadvertently agreed to never open a competing hamburger restaurant.
Can you see the lunacy of this argument? Am I alone on this?
Wrapping this up
I have no love for either TopStep Trader, or OneUp Trader. Currently, the business model is shady as hell.
However, what if several competitors are allowed to compete within the space? Imagine if a company were to emerge that offered 75% of the simulator fee’s to be channeled back into funded trading accounts?
OneUp Trader is a good start. The business model is not going away. We need more competition.
Thanks for reading. This is a story that I would truly love to read your comments. Personally, these buttholes at TopStep Trader have really gotten under my skin. Its time that someone knocks them square in the jaw.
This is fight worth having.