Topstep

Topstep could be described as the forerunner of Futures Prop Funds. Their slogan, “We started in the pits. We created this space,” is fairly accurate. Initially named Patak Trading Partners, it eventually evolved into what is now Topstep Trader. It has undoubtedly established and earned a level of trust. When choosing a prop fund most people are looking for the best conditions for the cheapest price, which is reasonable. The question is, does Topstep offer those conditions for futures traders?

There are essentially three categories of prop funds. The first group comprises prop funds who are just looking to fleece traders, often setting rules specifically designed for failure. The second group includes prop funds offering a relatively fair environment, decent trading conditions, and no gimmicky rules. Finally, there are prop funds which seem genuinely committed to helping traders succeed and become profitable. Topstep promotes themselves as the latter.

They have even developed their own proprietary trading platform, TopstepX, which is directly connected to the CME, without a middleman. Skip down to the commissions section to see what this means. Topstep, unlike some of it’s competitors, has only three funding options: $50k, $75k, and $150k.

1. $50k Buying Power: This challenge has a profit target of $3,000, or 6%, a maximum loss limit of $2,000, or 4%, and a max position size of 5 contracts.
2. $100k Buying Power: This challenge has a profit target of $6,000, or 6%, a maximum loss limit of $3,000, or 3%, and a max position size of 10 contracts.
3. $150k Buying Power: This challenge has a profit target of $9,000, or 6%, a maximum loss limit of $4,500, or 3%, and a max position size of 15 contracts.

You will notice that the $50k challenge offers a wider maximum loss limit. If you are concerned about losing your account, this would be the best option to choose. Unfortunately, Topstep heavily limits the number of contracts you may trade. In contrast, Apex Trader Funding allows double the position size for their $50k challenge. For conservative traders, this may not be a deal-breaker. However, you should be aware that this limit also applies to standard micros.

The Apex Trader Funding Challenge

• Entry cost: $165/month (before discounts) for $50k in funding. The challenge fee is non-refundable
  While monthly fees continue as long as it takes to complete your evaluation, once you pass, you will be charged a one-time fee of $149, regardless of the starting capital you chose. Monthly fees will then end.
• Challenge: A one-step program that requires 6% profit gain, regardless of the evaluation capital, with a trailing threshold ranging between 3-4%, depending on the account size.
• Trailing Drawdown: TopStep features a dynamic trailing drawdown, similar to Apex Trader Funding. The trailing drawdown stops trailing once you achieve a profit equal to your total drawdown.
  The drawdown percentage varies based on the account’s capital:
  $50k – 4% Drawdown, 6% Profit
  $100k – 3% Drawdown, 6% Profit
  $150k – 3% Drawdown, 5.6% Profit
• Daily loss limit: Is an objective not a rule, meaning violating it will not cause you to lose your account. Trading is simply paused until the next day.
  Daily Loss Limit per Account Size:
  50K Trading Combine = -$1,000 (2%)
  100K Trading Combine = -$2,000 (2%)
  150K Trading Combine = -$3,000 (2%)
• Max contracts: If you attempt to trade beyond this limit, your order will be rejected, but you will not lose your account. UPDATE: This is what they state, however, our readers have informed us that they have in fact suspended accounts for trading too many lots. We have reached out to Topstep for clarification.
  The limits are as follows:
  $50k acct: 5 contracts (1 micro = 1 mini)
  $100k acct: 10 contracts (1 micro = 1 mini)
  $150k acct: 15 contracts (1 micro = 1 mini)
• No time limit to complete challenge, however, you will be paying a monthly reoccurring fee until you pass
• No inactivity rule: You will not fail your account due to not trading for a certain length of time.
• No minimum trading days required to pass; however, once you have passed the challenge and are funded, you need at least 5 winning days with profits of $200 or more per day, to qualify for a payout.
• News trading: You are completely free to trade during news events without any restrictions. However, you are advised to exercise caution to avoid losing your account due to volatility.
• Holding overnight/weekend is not allowed and may result in the loss of your account. You are required to close all positions daily before 4:10 PM Eastern Time, from Monday through Friday. Trading may resume on the same day after 6:00 PM Eastern Time. TopStep attempts to flatten positions as a courtesy, unlike some futures prop firms that use it as an excuse to liquidate your account.
• No executions limit
• Price limits set by CME, if hit may trigger account loss
• Consistency rule: To pass the evaluation (Trading Combine), you cannot have one single profitable day accounting for more than 50% of your total profits. Don’t worry, if you experience a windfall trade, you simply need to continue trading until your profitable days average out, ensuring compliance with this rule. You will not fail your account if you have a big trading day.

Commissions

The prop firm sets and collects the fees. TopstepX, their proprietary trading software, offers the lowest commissions among Futures Prop Funds, yet it features the most limited selection of trading instruments. Also, access to TopstepX is restricted to funded accounts only. Topstep has indicated intentions to expand the range of instruments available on TopstepX in the future. Currently, the commissions Topstep charges on Tradovate are approximately 39% higher than Apex Trader Funding, but roughly 16% lower than Take Profit Trader’s rates.

For context, last month in one of my Apex Trader Funded accounts, I paid $6,366 in commissions. In contrast, on my TopstepX account, trading a similar volume of contracts, I paid $8,849. This substantial difference is significant enough to turn a potentially profitable strategy unprofitable. We consistently emphasize the critical importance of understanding how spreads and commissions influence and effect profitability. You want the firm that provides the best commissions and spreads.

Payout

Traders eligible for payout receive 100% of the first $10,000 in profits earned, then 90% thereafter. To be eligible for withdrawal, you must accumulate a total of 5 profitable days.

Profit Withdrawal Limitations

You are only permitted to withdraw 50% of your profits until you have accumulated a total of 30 profitable days, where a profitable day is defined as having profits above $200. These days do not need to be consecutive. Once you achieve 30 profitable days, you may withdraw 100% of your profits. However, keep in mind that, similar to other prop firms, doing so will terminate the account as your trailing drawdown will have moved to your starting balance.

The minimum withdrawal amount is $125 in profit.

Restrictions

Restrictions imposed by Topstep are fairly standard to Futures Prop Funds.

Verdict

Like FTMO and The5ers, Topstep is a well-established platform trusted by thousands of successful traders. Their rules are fair and not designed to make you fail. Topstep offers live trading accounts to select traders, which means improved commissions. We have traders in our group who are funded by Topstep and speak highly of their experience. We hope this continues.

If you’re looking for a trusted Futures Pro Fund, Topstep is a good choice. They offer a solid program with fair rules. The only significant downsides are that the $50k account allows only half the number of contracts compared to Apex Trader Funding, and commissions are substantially higher.

One of the biggest complaints we’ve seen lately with Topstep is slow customer service and slow funded account activation. Please keep in mind, 24-hours is a valid time-frame for account activation. Anything over two days is generally unacceptable.