I am currently trying out for a TopStepTrader account and recently opened a OneUp Trader account, as well. I was also taking all the same trades in my live account with only a single contract: however, I recently placed a pause on attempting to match in the live account because I am experimenting with some new techniques and seen no reason to risk triple jeopardy losses.
This is my first “combine” at TopStepTrader. Even though, I have taken a few hits recently, my ability to read the markets is still strong. On most of my losing trades, they would have worked out with only an 8 tick stop loss. I might could have already passed the TST combine if I loosened up my risk. However, one of my goals is see if I can make this new trading style work where I use very tight stop losses and only small targets. If I could get my win ratio up with these tight risk levels then I could pass with surety. On the other hand, if I loosen my risk then I know my probability of passing will be higher but it also makes it more likely a few losing trades could cause me to lose. Perhaps, I should quit playing around and do what I need to do to pass.
Frankly, I am more interested in the OneUp Trader account which is worth 5k. The TST account is only good for, I think, 2k. But, I would like to pass my first combine. If you start something: you need to finish. Yet, I am not sure it makes sense to pay double when I take the exact same trades in both accounts. Perhaps, I should try to trade, at least, slightly differently in one of the accounts, at least, to increase the learning value. As an aside, if you are trading on the simulator, instead of trading on a single simulated account: try trading on two or three, employing slightly different trade management techniques, thereby accelerating the learning process.
Both accounts employ a trailing max drawdown which makes it more difficult to pass then it might seem like at first glance. However, there is no time limit. I have confidence I can hit these goals without a time limit: perhaps not on a first try but within a few months. However, I know a lot of traders have also thought they could and tried and failed. As such, I need to carefully weigh the money I am paying spending that I could be saving for my live account versus the rewards of passing. I do not think it makes sense to continue with both accounts concurrently unless I am willing to trade them in different ways. Because the OneUp Trader is the better deal, if I am not 50% or better toward the TST profit target by the end of this billing term then I will have to strongly evaluate whether or not it makes sense to continue and will consider closing the TST combine.
As for my trading methodology, I am a tape reader. I read the markets using my AlphaReveal software and monitor additional proprietary graybox indicators and systems. The graybox signals do seem to be working well but require many times larger stop loss to be traded in a systematic fashion.
In this new experimental “scalping” style, I am trying to keep my typical loss to 3 ticks or less. The super tight stop losses represent the big unknown for me. In the past, I have found that using larger stop losses works relatively well for choppy markets like the ES.
Not typical or representative. No claims made.
NinjaTrader performance report for the TST account without commissions. My short trades aren’t making money: however my short predictions have been super accurate. I need to get better entries on the shorts or widen the stops.
Below are the live account results over same the period. Fills are similar: suspect the difference in performance is due to only trading 1 contract in the live. This was pulled from Tradestation’s “Account Manager”. On a day to day basis, the results I see in this report match my live after cost results. However, I am not sure if these results truly include all the costs: if anyone knows then please comment below.
Not typical or representative. No claims made.
Finally my OneUp Account, I have only been trading it for two days. I am trading it with more contracts because the risk limits are different. These stats may not be correct as they have had some issues with their cloud analytics.
As for my systematic trading, below was one S&P 500 e-mini futures system I offered for subscription in 2011. It is no longer offered: but I will be looking at potential new systems to offer in the near future.
It was around 80%-90% systematic with only minimal discretion. These results are after somewhat high commissions and fees and include a mix of live and simulated/hypothetical fills. Like many systematic systems, it wins consistently and has a much larger average profit per trade but is subject to taking the occasional large hits.
I hit the trailing max loss on the TopStepTrader account. The loss came as a result of max sizing every trade. It started when I lost a few max sized trades, and I knew it would take longer to work off the losses dropping my contracts. This was the wrong thinking and led to a series of bad trades. However, that would not have been enough to end my good run. I, also, max sized every single trade and had some “good trades” go bad, as well.
It is really difficult to grow a small account. In addition, given that it is only cost $100 to reload and time is money, I am not sure that treating it as a real account is the proper way. But, when you treat it as a game then you will have to reload.
I feel like the main value for me in this experiment was being able to inflect on trading as a game versus as an exercise in risking real money. For the most part, I treated it like I would real money but seeing it as a game was illustrative, as well. Beyond that thinking about trading more contracts opens up a lot of possibilities.
I am focused on the OneUp Trader and plan to continue with that and, if needed, reload until I have more information as to what is possible. I do not plan to reload the TopStepTrader because I do not like the idea of doing the “Funded Trader Prep”. While not an excuse, I feel like that was in the back of my mind and might have contributed to my loss.
As I stated, I do think these ventures are more “shot taking” approaches where one needs to hit a good run to make it work. And once funded, I think a trader who wants to do this long term needs to take out and reserve the first 25k to 30k in profits for eventual drawdown and lower performance. That is my plan anyway. I think the key to trading for paramount returns is dynamic leverage: variably changing the contract size based on the changing moment to moment conditions and trade quality.
I can see a few basic concepts that might be used to help a trader pass:
(1) Scalping with a highly selective style for just $50 to $100 per day day on 1 lot. If a trader can make even say $50 per day trading 1 lot then it makes more sense that it should be easier to scale that to $500 per day trading 10 lots then it would be to try to capture that 10x as much market movement. Stopping, at least, in the live and going to sim or study makes sense too once a profit target is hit unless the conditions are exceptionally good.
(2) Trading a shadow account with small size all the time to keep a good feel and then only moving to the live account (or the tryout account) when you have the highest confidence.
(3) Selective trend trading. Trends that trade in tight rising channels offer potential for adding a ton of contracts. Most markets don’t trend often or cleanly enough for this approach but if a trader can learn to recognize these times and markets then there is potential for really outsize returns in short time. However, this is very difficult to do in practice because it is easy to swing to a loss with a small pullback and then the trend resume.
(4) Stop management is paramount when trading multiple contracts. I will be exploring some cutting edge concepts that may help with that.
This is surprisingly one of my most popular articles even though most of this blog is dedicated to system trading. As such, you may want to check out this more recent post.
Curtis is passionate about markets. He has developed top ranked futures strategies. His core focus is (1) applying machine learning and developing systematic strategies, and (2) solving the toughest problems of discretionary trading by applying quantitative tools, machine learning, and performance discipline. You can contact him at firstname.lastname@example.org.
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