How Does TopStep Work?

Jeremy BiberdorfBy: Jeremy Biberdorf

March 13, 2024March 13, 2024

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If you’re in search of a prop firm that can provide you with the necessary capital and a competitive advantage to meet your financial objectives, TopStep might just be the right choice for you. Known as TopStep in the trading community, this program is tailored specifically for futures traders looking to secure funding.

So, how does TopStep work? I’ll get into the details later in this article, but essentially, it’s a platform that propels futures traders into the funded trading arena, offering a substantial support system to help them succeed.

With a presence in 143 countries and the ability to trade in 10 different currencies, TopStep’s global reach is undeniable. Moreover, the firm is compatible with 14 trading platforms, including popular ones like NinjaTrader, TradingView, and TSTrader, ensuring traders have the tools they need.

For a deeper understanding, continue reading my TopStepTrader review. This will give you a clear picture of whether TopStep aligns with your trading aspirations and how it can help propel your future trading ventures.

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TopStep Origin Story

Before diving into how TopStep works, it’s essential to understand where it came from. TopStep was founded in 2012 from the vision of Michael Patak, a trader who experienced firsthand the highs and lows of the futures market.

After enduring significant personal losses, Patak established TopStep to offer a safer pathway for traders to access substantial capital without the risk of losing their life savings. Initially making waves on the Chicago Board of Trade floor, the firm has significantly evolved.

It now operates from the vibrant West Loop Gate area of downtown Chicago, transforming into a significant force within the online prop trading industry with its innovative Trading Combine platform.

Over the years, TopStep has not only marked its decade-long journey in the prop trading industry but also cultivated trust among traders worldwide. This enduring presence is a testament to its credibility and effectiveness in the field.

Today, TopStep boasts a global presence, evident in its diverse trading community spread across 143 countries and the availability of accounts in 10 different currencies. This expansion and recognition, including being listed by INC.5000 for its rapid growth, highlight TopStep’s commitment to breaking down barriers in the trading world, making it accessible and inclusive for a global audience. Through the years, TopStep has remained dedicated to its mission, educating and funding thousands of traders around the globe.

How Does TopStep Work?

Understanding how TopStep operates is crucial for aspiring traders looking to leverage this platform. Initially, you’ll choose from three different account sizes, which vary in buying power and monthly fees. Once you’ve made your selection and linked your account to one of the supported trading platforms like TradingView, you’ll embark on the Trading Combine journey.

This stage is where you demonstrate your ability to generate consistent profits while managing risks effectively. Unlike other programs, TopStep doesn’t rush you; you can take your time to reach your profit targets but must trade for a minimum of two days.

Speaking of profit targets, they’re set at 6% of your chosen account’s buying power. For instance, a $50,000 account means you need to aim for $3,000 in profits while adhering to specific risk limits, such as maintaining a maximum of five open contracts and not exceeding a trailing max drawdown of $2,000.

TopStep has simplified its funding process: now, achieving your profit target in Step 1 could directly lead to funding, sidestepping the previously mandatory two-step process. However, remember the consistency target: no single trading day should account for more than 50% of total profits, ensuring you spread your successful trades over multiple days.

Upon successfully passing the Combine, you’re presented with two paths: the Express Funded Account, operating with simulated funds, or the Live Funded Account, where you trade with real capital. The Express option involves a one-time activation fee of $149 but no monthly charges, whereas the Live account requires ongoing data subscription fees.

To maintain your funded status, you must adhere to the initial trading guidelines from the Trading Combine. This includes the daily loss limit and the overarching Maximum Loss Limit, the cardinal rule of the program. Breaking this cardinal rule by exceeding the Maximum Loss Limit results in disqualification from funding.

The Trading Combine structure is designed to promote discipline and effective risk management, with a focus on achieving set profit targets while avoiding significant losses. This systematic approach ensures traders are well-prepared for the realities of the market before they progress to managing actual capital.

How Do I Get Paid From TopStep?

To understand how you get paid as a Topstep Funded Trader™, it’s essential to grasp their refined payout system designed for a better withdrawal experience. Once you reach the status of a Topstep Funded Trader™, you’re entitled to request payouts up to four times each month, adhering to specific guidelines.

Withdrawals are facilitated through bank transfers or ACH, and while Topstep doesn’t charge a commission, there may be fees from the payment system. If these fees go beyond $500, Topstep will cover them; if not, traders incur a $50 fee.

To qualify for a payout, you need to rack up five profitable days with minimum earnings of $200 per day, these days don’t have to follow consecutively. Plus, you can withdraw up to half your account balance per request, but it’s wise to leave some funds in your account as a buffer.

Breaking the Maximum Loss Limit is a significant violation, leading to account termination. However, if this occurs, traders still get their fair share based on the 90/10 profit split, receiving 100% of their account balance. This rule emphasizes the critical importance of maintaining disciplined trading habits.

Regarding payment for the Monthly Trading Combine subscription, Topstep accepts a range of payment methods including Visa, MasterCard, PayPal, American Express, and Discover. Bear in mind that while most standard credit or debit cards are accepted, certain cards or gift vouchers may face issues during processing.

The timeline for fund transfers varies: bank card transactions usually complete within 1-2 business days, while electronic payments may process faster. Note that while subscription payments skip verification, withdrawal transactions require it to ensure security and compliance.

Final Thoughts

If you’re diving into futures trading but want to avoid the high stakes of using your own money, TopStep might be what you’re looking for. It challenges you through its Trading Combine, where you show you can make smart trades under watchful eyes before you handle real cash.

Stick to their rules, hit your targets, and you could start seeing real payouts. Sounds interesting? Click Here to dive deeper and see if TopStep fits your trading style.

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Jeremy Biberdorf
Jeremy Biberdorf

About the Author:

Jeremy Biberdorf is the founder of Modest Money. He's a father of 2 beautiful girls, a dog owner, a long-time online entrepreneur and an investing enthusiast.

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