TopStep is a proprietary trading firm that provides traders with the opportunity to trade with the firm’s capital after successfully passing an evaluation process. Unlike traditional trading, where you use your own money, TopStep offers a funded account program that allows traders to trade futures markets with minimal personal financial risk.
Founded in 2012, TopStep’s mission is to help aspiring traders succeed by providing a structured path to trading capital while encouraging discipline, risk management, and proper trading habits.
The financial markets are highly accessible but also notoriously difficult to navigate. Most new traders fail due to poor risk management, lack of discipline, or undercapitalization. TopStep exists to bridge this gap by:
According to TopStep the firm aims to create a win-win environment where traders can develop their skills and the firm can identify successful traders to fund.
TopStep uses a two-step evaluation process called the Trading Combine, which is designed to assess a trader’s ability to meet specific profit goals while adhering to strict risk management rules.
The Trading Combine is a simulated account where traders must:
The Combine has different account sizes (e.g., $50,000, $100,000), each with varying profit targets and rules. Traders must pay a monthly subscription fee to participate.
If you pass the Combine, you’ll receive a funded account where you trade TopStep’s capital. This account has real profit potential, and after reaching a total of 5 profitable trading days with at least 200 USD+, you can request a payout of 50% of your balance. After 30 of those 200 USD days you will be able to withdraw 90%. Also, after your first 10k of withdraws TopStep will take a cut of 10%. During all this time you will have to adhere to the risk management rules.
Step 3: Live account
Once the risk managers of TopStep classify you as a consistently profitable trader you will move to a live account. A live account trades on the real market. The transition to a live account is mandatory and can therefore not be refused. All accounts will be merged and the balance from your XFA(‘s) will be transferred to the live account. In addition, you will now have to pay professional data fees which I believe amount to 130 USD per month.
While TopStep provides an opportunity for traders, it’s important to understand their business model. The firm primarily earns revenue from:
It’s important to note that TopStep and similar propfirms operate on the assumption that most traders will fail by blowing up their account. Additionally the addictive nature of the combine and trading will make these same traders continuously pour money into combines in the hopes they will pass one. This income is used by TopStep to fund the payouts of XFA accounts aswell as their business profits.
While following a livestream of TopStep one trader was mentioned who blew up a 16 accounts in one day! If the trader bought 50k’s this would mean a cost of 800 USD, and 2400 USD if they were 150k accounts.
I personally would recommend a trader to only get a 50k account and manage their risk well. Additionally, do not get more than 1 combine per week.
As a trader focused on the CME futures markets, I use TopStep for two main reasons and a few secondary reasons.
TopStep allows me to trade futures without risking my own capital. If I make mistakes or hit a drawdown during the Combine, I only lose the monthly subscription fee rather than thousands of dollars. I personally only spent 250 USD (2x combine + 150 activation fee) to get my first 3k payout.
2. Decrease trading stress by gamifying trading
Personally i trade significantly worse when i am stressed about potential real losses. By using a propfirm i now trade with high leverage while not risking any of my own money. This allows me to have calm of mind and mainly focus on the trade and not the result. Rash behaviour in trading is THE way to loose money.
—-
The Combine rules, such as maximum daily loss limits and profit targets, help me stay disciplined. These rules mirror the structure and accountability required for long-term trading success. A strict 1000 USD loss limit is enforced. This helps a lot in reducing drawdown and turns you into a better trader.
Trading with a funded account feels like managing professional capital. It pushes me to think and act like a professional trader, which is crucial for growth.
Every failed Combine attempt is a learning experience. It helps me refine my strategies, manage my emotions, and develop better risk management habits.