Topstep Review and Analysis
Overview
Founded in 2012, Topstep has become one of the biggest proprietary trading sites online. Initially established as TopstepTrader and TopstepFX in the futures and forex trading domains, the company eventually merged to form a single entity named Topstep in 2020. Topstep is based in the USA, but it is available for everyone to use worldwide. Traders are invited to join their "forex funded trader program," which gives them the chance to use Topstep's money (and gain a healthy cut of the profits), without risking their capital.
In 2021, Topstep funded 8389 accounts which is a massive number by industry standards, and traders could withdraw over $3.3 million. The question is 'what is drawing so many people to proprietary, or "prop", trading firms?' and 'why is Topstep such a popular choice?'.
Topstep: What’s it all about?
The idea behind Topstep and other prop firms is simple: trade using their money and take a percentage of the profits. In the case of Topstep, there are three account sizes you can choose between with different amounts of purchasing power ($200K, $300K, or $500K). Traders must first pass virtual trading tests before their accounts go live with real money. Choosing a large position size, such as $500K, may be more likely to yield the most significant profits, but traders will also need to hit higher targets (and avoid exceeding the loss limits). Traders must also pay a monthly fee during the trading evaluation. This fee is beneficial to traders who believe they can pass the test quickly versus firms that ask for a more expensive one-off payment.
In short, you need to demonstrate two things to Topstep before they will provide you with a funded account. First, you must prove you can make a profit and, second, you must show you can manage risk. Topstep is not looking for mavericks. They want their traders to earn steady profits week after week no matter the market conditions. Don't think you're up to it? Topstep has made the unusual move to provide free personal, group, and digital coaching for anyone looking to up their trading skills.
Funded Accounts
What are funded accounts?
Your account will be fully funded when you have passed the tests, or "challenges," using a virtual money trading account, known as "Trading Combine Accounts," Topstep will fully fund your account. Everyone is eligible, and there is no small print waiting to catch you out. On both the demo account and funded account, traders will use 22 currency pairs on the forex ("foreign exchange") market. Make sure you have researched how to trade on the forex market before signing up. Topstep also provides useful trading and forex analysis tools you can use throughout your time with them. Suppose the forex market isn't for you. In that case, Topstep gives you the option of trading futures on the most popular CME products (including everything from stocks and indexes to commodities and cryptocurrencies).
In a broad sense, this trading system is not unique to Topstep. Many prop firms offer similar deals, so how does Topstep compare with them? Below, I have compiled a list of the pros and cons of Topstep, followed by some competitor research to help you decide which proprietary firm is right for you.
Challenge Overview
Topstep Challenge review
There will always be some traders who are unhappy with certain aspects of a prop firm's challenge review. Although Topstep is no exception to this, most traders find it a fair, easy-to-use, and efficient system of finding traders worthy of entrusting hundreds of thousands of dollars to. It can be easy to start taking for granted, but Topstep offer up to $500,000 of their own money. Wouldn't it be crazy if they didn't have a test before handing over this amount of money?
The profit targets on Topstep are entirely reasonable and in line with many other well-regarded prop firms. Topstep also has a limit on the number of losses that can be accrued, and targets for profits gained. Topstep does this to discourage certain trading habits like short trades and other actions they believe will be detrimental to your trading figures in the long term.
Although the name "Topstep Forex" may lead you to believe you can only trade on the forex market, you can also opt to trade futures on several marketplaces, including the stock market, commodities, and Forex. Topstep comes with a great degree of flexibility regarding trading restrictions, and its challenge is available to everyone in the world (*provided their country is not a banned list for trading). For those who successfully complete the challenge, the potential payouts are enormous!
Pros and Cons
Let’s talk about the good stuff…
The user figures show us that Topstep is indisputably one of the most popular prop firms active today, and there has got to be some good reasons for it. Let's take a look at what the positives of Topstep are:
- Monthly fee: this may be a cheaper alternative than a one-off fee if you can quickly complete the virtual trading challenges.
- Platform features: state-of-the-art trading features include metrics trackers (account balance, average winning/losing trade), insights (which can be used to improve a user's trading abilities), and more.
- Account size: three options to suit different traders, ranging from $300K to a massive $500K.
- Trustworthy: as an industry leader with an excellent ten-year track record and positive reviews, including a rating of 4.4 on Trustpilot.
- Global: traders from 143 countries have used Topstep, and it is open to everyone worldwide.
- Coaching: Topstep offers free personal, group, and digital coaching to get your trading skills to the next level.
- Forex or Futures: you have the choice whether you want to trade on the forex or futures markets (and receive funding for both).
Evaluation Metrics
Overall metrics
To get a clear view of what Topstep offers, we have reviewed and scored the Topstep Challenge below.
- Challenge difficulty: The Topstep Challenge is a simple yet effective way of separating the wheat from the chaff. It is not a perfect system, and there are grievances about some aspects of it, but, overall, it is a transparent and fair means of ensuring you know what you are doing. It's a great platform to take on the challenge, and it has easy-to-understand metrics that reflect your trading progress.
- Customer support: The customer support with Topstep is good, clearly reflected across several review platforms. There are some complaints about the quality of customer support, but most of these have been responded to.
- Fee: The cost on Topstep can be a positive or a negative depending on how quickly you pass the challenge. As it is a monthly payment, you will save money (compared to prop firms asking for more expensive one-off payments) if you complete the challenge quickly, but you will lose value for money if you are too slow.
- Payout scheme: Compared to other proprietary firms, Topstep has a high percentage payout scheme or, to put it another way, it takes a lower percentage cut on your profits.
Meet the CEO
Michael Patak is a Founder and CEO at Topstep. He is a financial markets professional based in Chicago and a former floor trader and member of the Chicago Mercantile Exchange. He is best known as the founder and chief visionary officer of Topstep Trader, an educational and funding platform designed for new traders.
Previously he was the founder of Gorilla Gamer.
In 2016, Patak was a finalist for the Ernst & Young EY Entrepreneur Of The Year® 2016 Award in the Midwest, which encompasses Illinois and Wisconsin.
Frequently Asked Questions (FAQs):
What is Topstep?
Topstep is a proprietary trading firm that allows users to trade without risking their own money. Instead, Topstep will provide up to $500,000 of its own money for members to trade with – and traders can keep most of the profits. However before being entrusted with Topstep's money, traders must pass trading challenges to prove their ability.
Where is Topstep based?
Topstep has been based in the USA since it started in 2012. They are a team of around 60 based in downtown Chicago.
Who is the CEO of TopStep?
Michael Patak is a Founder and CEO at Topstep. He is a financial markets professional based in Chicago and a former floor trader and member of the Chicago Mercantile Exchange.
Who can use Topstep?
Topstep is open to traders from all around the world. In 2021, 143 countries were represented in their trading community. Exceptions generally include reasons beyond the control of Topstep, such as meeting the minimum age requirement and the trading restrictions your country may or may not have.
Topstep prop firm, worth a punt?
Since its launch in 2012, Topstep has risen to become a significant player in the prop firm scene. They have been on the Inc. 5000 list of America's fastest-growing companies, recognized on the Deloitte Technology Fast 500 list, and more. As well as having all the essential features of a prop firm platform, their overall metrics score highly, particularly for their challenge difficulty, customer support, and payout scheme. Topstep is well worth a punt, or at least a spot on your shortlist!
How trusted is Topstep?
The trusted source of information on fintech matters SBO, gave Topstep a 3/ 5.00 rating based on analysing 20+ criteria and testing. Topstep is currently in 11th place in this ranking. FunderPro is currently rank as the number one.
What is the Topstep fee?
The TopStep Challenge with an initial balance $50K costs $165; $100K balance for $325; $150K balance for $375 (per month)
What is the profit split for Topstep?
TopStep will pay out 100% of the first $5,000 you generate and 90% from that amount.
What is Topstep evaluation process?
“TopStep Challenge,” a two-step evaluation process that you must pass to get your trading account funded.
How do I become an Topstep Trader?
What is an acceptable max drawdown for Topstep?
2% Daily loss limit.
4% to 3% Max trailing drawdown (the percentage varies depending on the account you choose). Maximum Drawdown is the Distance between the highest and lowest points (maximum and minimum peak).
What is Topstep Trading Duration / Time restriction?
The TopStep Challenge has No time limits.
What is Topstep leverage?
The leverage offered is up to 1:100 (Forex) and can be lowered upon request.
What financial instruments can be traded at Topstep?
Futures Markets: CME Exchange (17 instruments) NYMEX Exchange (4) COMEX Exchange (3) CBOT Exchange (13)
Can I trade news at Topstep?
Can I hold trades overnight or over the weekend?
