If you’re exploring the world of prop trading, Topstep is a name that frequently stands out. Known for its focus on futures trading, Topstep offers a unique platform for traders to access capital while honing their skills in a structured environment. Here’s a detailed look at what Topstep provides, including its evaluation process, account sizes, costs, ownership, and more.
What is Topstep?
Topstep, established in 2012 and based in Chicago, Illinois, is one of the pioneers in the prop trading space. The firm specializes in futures trading, allowing traders to demonstrate their skills in a simulated environment before earning access to live-funded accounts. Unlike traditional trading setups, Topstep doesn’t require traders to risk their own capital, making it an attractive option for both beginners and experienced traders.
Ownership and History
Topstep was founded by Michael Patak, a former floor trader with years of experience in the futures market. After facing his own challenges in trading, Patak envisioned a firm that would provide a safer, structured path for traders to succeed. His mission was to create a system where traders could practice, improve, and earn funding without risking their financial well-being. Today, Topstep is a globally recognized firm with a strong community of traders.
How Does Topstep Work?
At the core of Topstep’s offering is the Trading Combine®, a two-step evaluation designed to assess a trader’s skills, risk management, and consistency.
- Step 1: Prove Your Strategy
- Traders must reach a specified profit target within a set number of days while adhering to predefined risk parameters.
- For example, you must avoid exceeding the daily loss limit or the overall drawdown threshold.
- Step 2: Demonstrate Consistency
- After passing Step 1, traders need to show consistent performance by meeting smaller profit targets while maintaining the same risk management standards.
Funded Accounts and Payouts
Once a trader successfully completes the Trading Combine®, they receive a funded account. Here’s what makes Topstep’s funded accounts appealing:
- Buying Power: Up to $150,000 in simulated buying power.
- Profit Sharing: Traders keep 100% of the first $10,000 in profits and 90% of everything thereafter.
- Withdrawals: Payouts are straightforward, with flexible withdrawal options to suit traders’ needs.
Account Sizes and Prices
Topstep offers a range of account sizes to cater to different trading preferences and risk appetites. Below are the available options:
Account Size | Profit Target (Step 1) | Daily Loss Limit | Monthly Fee |
---|---|---|---|
$50,000 | $3,000 | $1,000 | $165 |
$100,000 | $6,000 | $2,000 | $325 |
$150,000 | $9,000 | $3,000 | $375 |
Traders can select the account size that aligns with their trading goals. Monthly fees are non-refundable and act as the cost of participation in the Trading Combine®.
Supported Trading Platforms
Topstep supports multiple platforms to ensure traders have access to the tools they prefer. These include:
- NinjaTrader
- TradingView
- TopstepX (Topstep’s proprietary platform)
Each platform comes with features tailored to futures trading, including advanced charting, technical analysis tools, and seamless order execution.
What Can You Trade on Topstep?
Topstep focuses exclusively on futures markets, offering access to:
- Equity Indices: S&P 500, Dow Jones, Nasdaq
- Commodities: Crude oil, gold, silver
- Currencies: Major forex futures pairs
- Treasury Bonds: U.S. government debt instruments
This focused approach makes it an ideal platform for traders passionate about futures markets.
Key Rules and Risk Management
Topstep is committed to fostering disciplined trading. The firm enforces strict rules, including:
- Daily Loss Limit: A cap on the maximum loss traders can incur in a single day.
- Overall Drawdown Limit: Traders must avoid exceeding the total drawdown threshold.
- Consistency Rules: Encourages traders to balance profit days with controlled losses.
- Scaling Plan: Limits position sizes to help traders manage risk effectively.
Why Choose Topstep?
Topstep stands out for several reasons:
- Structured Evaluation: The two-step process ensures traders are prepared for live trading.
- No Capital Risk: Traders don’t risk their personal funds during evaluations.
- Professional Development: Access to coaching, live streams, and educational materials helps traders improve.
- Global Community: A robust trader community fosters collaboration and shared learning.
Critiques and Considerations
While Topstep offers many benefits, traders should also consider the following:
- Monthly Fees: The Trading Combine® costs can add up, especially if traders don’t pass on their first attempt.
- Futures Focus: Topstep exclusively deals in futures markets, which may not appeal to traders who prefer forex or stocks.
- Strict Rules: The firm’s risk management rules, while beneficial, can feel restrictive for aggressive traders.
Is Topstep Right for You?
Topstep is best suited for traders looking to enter the futures market without risking personal capital. Its structured approach, strong community, and focus on education make it a valuable platform for aspiring professionals. However, traders must weigh the costs and rules against their own trading style and goals.
Conclusion
Topstep remains a leader in the prop trading industry, thanks to its robust evaluation process, focus on futures markets, and commitment to trader development. Whether you’re a new trader seeking guidance or an experienced trader looking for funding, Topstep offers a platform to sharpen your skills and trade with confidence.