TopstepFX Review – All about the new project of Michael Patak
TopstepTrader may be one of the larger proprietary trading firms in the world. And it’s open to anyone around the world.
In 2018, TopstepTrader funded more than 900 futures traders – offering traders the ability to trade TopstepTrader’s capital without risking personal funds.
All those traders had to do was pass TopstepTrader’s Trading Combine®, an objective evaluation that tests their skill in profiting from the market and managing risk.
This is also the reason why some time ago I already had a closer look at TopstepTrader when I wrote my personal review. At this time, among other points, I was disappointed that it was only possible to trade Futures Contracts with TopstepTrader.
In the beginning of 2018, TopstepTrader introduced the brand-new Forex Trading Combine (https://www.topstepfx.com). In August 2018 the company officially announced TopstepFX as a way for forex traders to earn proprietary capital.
So, how does TopstepFX work, and what is the difference between TopstepFX and TopstepTrader – besides the fact that currency pairs are traded instead of Futures?
To answer these questions, I contacted TopstepTrader to ask the CVO and founder Michael Patak.
It is really a big pleasure for me that Michael Patak, the founder of TopstepTrader, was willing to do this interview with me. In this interview, he will tell us more about himself. Besides this, he will give us a first overview of the new program TopstepFX, and he will specify the main differences between his new offer TopstepFX and the existing program of TopstepTrader.
Michael, first of all, thanks a lot for taking the time for this interview! In the beginning, could you, please, tell us a little bit more about you and your career before TopstepTrader? Also, I would be excited if you give us some background information about how and why TopstepTrader was founded in 2012?
It’s great to talk with you. I got my start trading like so many traders out there. I was incredibly passionate, but not very good. Frankly I had no concept of risk management, and that’s why when I first started trading, I promptly lost $90,000 in three separate accounts.
It was only after I joined a proprietary trading firm and was put on a trading simulator that it started to click. I needed to make rules around my trading – things like don’t lose too much on a given day or week or when and what products I could trade.
Fast forward, I found my niche trading Dow Futures on the trading floor in Chicago. But I never could shake the idea that there has to be a better, less expensive way to learn the trading lessons I spent $90,000 learning. No one should put their life’s savings or child’s college fund in danger because they want to trade.
And TopstepTrader was born from that idea. We put rules around what it means to trade well, become your accountability partner and then provide you with trading capital when you meet the objectives.
TopstepFX - The Funded Trading account
With your offer to trade Futures within a funded trading account after a successful qualification during the Trading Combine, TopstepTrader belongs to the fastest growing companies in the United States. What is the main reason why your customers are so satisfied with your products and services?
It’s amazing that traders – myself included when I started – think that you can learn to trade and compete with professionals at major banks around the world from day 1.
Everyone would realize how silly it is to try to make the NFL without having played American football before. But with trading, we all think we can profit consistently from the start.
You only realize after you try and fail that there is so much that goes into being successful – the most important of which may be your emotions and mentality.
We have been able to grow so quickly because we meet a need in the market. So many traders have been burnt out by brokerage accounts where they lose thousands of dollars without learning any lessons.
And they have this passion and want to do better. While we aren’t perfect for every trader, we are perfect for them.
Behind The Scenes
Would you, please, be so kind as to give us a look behind the scenes and to tell us a little bit more about the similarities between the most successful traders who are trading the funded accounts?
We did a study of our traders in 2017 to answer this exact question. The short answer is that the successful traders allowed themselves more opportunities to profit from markets – and never lost too much in one day. (Here’s the blog post.)
First, we ask traders when they enter a Funded Account what their personal daily loss limit will be. While we have a maximum daily loss limit (for example, $1,000 in our $50K Trading Combine), we also allow trader to set a more strict daily loss limit.
Of the traders that were profitable in 2017, 20.5% of them violated their personal daily loss limit. Of the traders that were unprofitable, 49.3% violated their personal daily loss limit.
Second, 40% of traders who were unprofitable had an average losing day GREATER than an average winning day. Think about that for a second. They lost more on their average losing day than they made on the average winning day. That is not a recipe for success.
Finally, as it relates to losing days, the unsuccessful traders also let themselves lose 22% more on their largest losing day than the profitable traders.
The takeaway from all this: it all comes down to risk management. It’s a cliché, but it’s true.
Even though there are no exact statistics that are proving this, only a maximum amount of about 10 % of all traders with an own account use to be successful with day trading in the long term. Does this also apply to the program of TopstepTrader or did you notice any significant differences?
Trading is an incredibly challenging endeavor. There’s no question about that. But traders come to TopstepTrader for different reasons. Some would like to be full-time traders. Others are just exploring a passion.
The most significant difference between trading with TopstepTrader and somewhere else is the amount of money it takes to learn and get started.
In a brokerage account, you’re putting $5,000 or $10,000 at risk at a minimum. At TopstepTrader, you can learn the same lessons for $165 per month.
TopstepFX At a Glance
Can you, please, tell us the main reasons why TopstepFX has been created?
Forex is an entry-level market where a lot of traders have their first experiences. But it often doesn’t work out.
A French regulator did a study that suggested that the average retail forex trader loses $13,000 trading forex with a broker. Worse: they do so without learning a thing.
We’re trying to fix that – and forex is a place that a low-risk trading solution is greatly needed. We believe that being able to instill good risk management practices from the beginning will be incredibly helpful to them throughout their trading career – whether with TopstepFX or their own brokerage.
So far, your in-house trading platform TSTrader and some 3rd party platforms have been used for trading Futures. Which trading platforms may be used for trading currencies with TopstepFX?
Traders use MetaTrader 4 in TopstepFX – the most popular forex trading platform in the world.
The 14-days free trial
In my personal opinion, the TopstepTrader 14-days free trial belongs to the main advantages. There is a significant difference between your demo account and the other demo accounts available on the market. The main difference is that when somebody uses your demo account, the compliance with all rules is strictly monitored. This way, uncontrolled purchases, and sales are practically avoided. So, regarding their own discipline, especially beginners are much more challenged, and this is highly important for their further development to become successful traders in the long term. Do you also offer this kind of a demo account for TopstepFX?
TopstepFX does not offer a demo account at this time. Forex demo accounts are not hard to come by, and we thought that it was important to get the Trading Combine opportunity out and to the market in 2018.
In 2019, we will be looking to enhance the user experience with improvements to the product. Currently, those improvements do not include adding a free trial, but it is something that we will look at and continue to receive feedback on.
As it relates to the product though, we do have a satisfaction guarantee. That means that if you do start a Trading Combine and it is not for you (for whatever reason), we will refund your money if you request it within seven days.
How many currency pairs can I trade by using TopstepFX and is there any difference between trading currency pairs with Trading Combine and with using a Funded Account?
You can trade 22 pairs, including the eight major currency pairs, as well as many of the currency cross pairs. Currently, we do not allow traders to trade some of the more exotic pairs. With the wide spreads and low liquidity, they just may not be a fit for our account.
Traders can trade any of these currency pairs in the Trading Combine and the Funded Account, so there is no difference there.
TopstepTrader vs. TopstepFX
What are the most significant differences between the traditional TopstepTrader program and the TopstepFX program everyone should be aware of?
The largest difference is that in the futures Trading Combine, traders need to be flat each day at 3:10:00 PM CT. They can reopen positions at 5:00:00 PM CT.
In the forex Trading Combine, traders can hold positions overnight and do not have to go flat until the end of the week – by 3:45:00 PM CT each Friday.
The forex Trading Combine also does not have a day requirement, but instead requires you to place a certain number of trades, depending on your account size.
What we are trying to get at here is consistency – so in futures, that’s measured by trading multiple days. In forex, because you can hold positions, we changed the requirement to be a certain number of trades. But the goal is the same: to identify consistently profitable traders.
New Powerful Features
Do you plan any other significant updates for the near future and could you, please, already tell us a little bit more about them in advance?
As I mentioned, in 2019, we are focused on making the TopstepFX Trading Combine the best place for someone to trade forex. That will include some enhancements to the metrics that we track on the trader dashboard, as well as insights that we can offer for how each user, on an individual basis, can improve their trading.
We think that will be really powerful. After all, we are all working towards the same goal – to make money consistently from the market. And the more we help you reach that, the more we can differentiate ourselves from the alternative places to trade forex.
Of course, we also always listen to traders. So if there are any things that you want to see, please reach out to our Trader Support team and let us know.
Michael, thanks a lot for this valuable first-hand information!
This was my interview with Michael Patak, the founder of TopstepTrader. You may also be interested in this: TopstepTrader Review