So I guess it’s finally time. The most frequent question I have ever gotten is “what’s your strategy?” You really can’t sum it down to just one thing. And that’s why this book exists and there’s 30 chapters. But this section and this chapter specifically are meant to be guidebooks and playbooks to what I did to become #1 on Topstep. Thus, it still must be and should be applied with the context of the other chapters and parts in mind.
Combines.
I only traded the 150k challenges. I prefer 150k to the 50k evaluations. There are times where the smaller evaluations are better deals considering the risk to payout ratios. I like the added capacity. If I am playing a game where I have a statistical advantage, I always want to maximize capacity. That comes from having higher sized payouts, higher live transfer caps, more drawdown.
The math works like this.
50k
Profit Target: $3,000
Drawdown: $2,000
Cost: $50
PT/DD: 1.5
Cost (with activation): $200
Cost per $ of Drawdown Buffer (Lower = Better Efficiency): $200 / $2,000 DD = $0.10
100k
Profit Target: $6,000
Drawdown: $3,000
Cost: $100
PT/DD: 2
Cost (with activation): $250
Cost per $ of Drawdown Buffer (Lower = Better Efficiency): $250 / $3,000 DD ≈ $0.083
150k
Profit Target: $9,000
Drawdown: $4,500
Cost: $150
PT/DD: 2
Cost (with activation): $300
Cost per $ of Drawdown Buffer (Lower = Better Efficiency): $300 / $4,500 DD ≈ $0.067
So if you have a 100% evaluation pass rate, you are paying 6 cents for every 1 dollar of risk you get. That is why I suggest taking advantage of it. The 50k combines almost double that same cost. Use the extra “savings” and with the added scaling benefits (more contracts) to really push this advantage.
I historically have between a 30% and 40% passing rate on combines.
With a 30-40% pass rate on the 150K combine, we're adjusting for expected failures/resets (each reset costs the full $149 eval fee, but activation $149 only upon passing). Base drawdown buffer remains $4,500.
For 30% Pass Rate (p=0.3)
Expected attempts to pass: 1 / 0.3 ≈ 3.333
Expected eval costs: 3.333 × $149 ≈ $496.67
Total expected cost: $496.67 + $149 (activation) = $645.67
Effective cost per $ of DD buffer: $645.67 / $4,500 ≈ $0.143 (14.3 cents per dollar of risk)
For 40% Pass Rate (p=0.4)
Expected attempts: 1 / 0.4 = 2.5
Expected eval costs: 2.5 × $149 = $372.50
Total expected cost: $372.50 + $149 = $521.50
Effective cost per $ of DD buffer: $521.50 / $4,500 ≈ $0.116 (11.6 cents per dollar of risk)
This is still a bargain vs. funding your own account (where you'd risk 100 cents per dollar), but lower pass rates inflate costs and harm trading psychology which we have talked about/will talk more about in future chapters.
My Combine Attack Plan.
There was a small period of time where I was trading on Topstep where combines had a $3,000 daily loss limit and a $4,500 max loss limit. To combat this, I would just use $1,500 risk per position. This would essentially guarantee me 3 (consecutive losing) trades of equal size to blow the evaluation.
Now currently as it is, the daily loss limit was removed and set equal to the MLL ($4,500).
My approach for this was a bit different because of the added flexibility. I was able to “delegate” more risk to sizing, cutting down my loss run rate to 2 (consecutive losing) trades.
And, you are just going to say, KJ you were gambling? This whole book is about gambling? No. This is just how I approached absolute maximum risk per trade. The takeaway here is not gambling your accounts. Churning. Reset after reset. “It’s cheap risk”. If you hold this same mindset, you also have to consider the casino limiting you. Topstep has created a “flagged” program for those churning, cycling, gambling accounts. The message is not to gamble your accounts. But to approach risk and sizing in a way that fits YOUR style and your value you place in your trades.
As an aside, I mentally think about it as a trade within a trade. Prop firms become a trade. Where you pick which firms, which rules you want, for which type of setup/trade. The approach I have and what I recommend having is approaching evaluation purchases from a bankroll perspective. Give yourself a monthly budget. I have x amount to “deploy” over _____ firm(s). Approaching props with an ROI mindset. A “trade” mindset. I am betting $300 on this Topstep $150k XFA. The bets that you take have to make sense from a bankroll perspective.
For daily profit targets “goals”, I would aim for the “max” $4500. That would take 1-2 winning trades personally. Estimating size would be between 3-5 minis. Points wise: daily target would be 40-50 points.
*This is all personal data and strategies I used. You should come to find your own and what works for you. But you see how it all ties in. Keeping size dynamic and sizing based on setup. A healthy attainable points target. A max trade loss limit that prevents against single trade blowups. It really must be all in alignment.
If you are trading 50k account, maybe its micros. Maybe you target less/more points. How does that reflect in your TRADE sizing and ACCOUNT sizing. They are two different things you have to get right. Add the third in and that’s BANKROLL sizing. Get all 3 right and you statistically have an edge barring poor trading performance.
XFA Stage.
You just paid your activation fee. Your accounts are ready to go. Time to start trading. You need to build a “buffer”. The first thing you need to do is build a starting profit balance. It’s the most important thing. There’s many ways to do so. And often the most natural is the best. which is just trade how you normally would. I turned down the sizing from what I used in the evaluation stage. I allowed my positions to breathe and run. I don’t think there is any rationale behind letting positions run in the evaluation stage. Since you have a cap on daily profit and in my system of 2-3 days of passing, it didn’t make logical sense to use smaller sized positions and target higher points.
Now, the XFA stage flips that on its head. You get rewarded for that. You want to use your drawdown. Going back to the math I touched on early, this is the time where the math is in your favor. This is your chance. If you can secure 100-200 points (*should disclose that any points mention is referring to NQ) with your normal size or increased size, you are setting yourself up to scale.
When I say buffer, I don’t think there is any one “buffer”. I don’t like the thought where you stack base hits and take profits conservatively and then flip the switch. Like all things, there are times to hit the gas pedal and times to hit the brakes. You have to match that rhythm and cadence with your account and the market. I will touch on this in later chapters, but trade selection + day selection is very important. Match your “account goals” to the market. If the market you’re trading isn’t moving a lot, don’t try to be a hero and make something out of nothing. Conversely, if the market is moving, you can look to target and aim for higher point goals and thus higher profit goals.
So there isn’t just one buffer. There is a buffer at each payout date. Take a large % of the profits out and you got to go back to the start. Be smart about where you are at in the payout cycle. If I was a day or two away from a payout and I had a good week already, I would scale back. Lock out after the first winning trade.
There is a lot of strategy involved. It is a gamified trading experience. You have to do X with X amount of days and you get X reward but if you lose X, you lose X amount. There is no discounting that it’s a different game from trading itself. This book isn’t intended to touch on trading or executing directly. Trade however you trade. But you have to apply it to the restrictions of the game makers. They lay out the rules and the structure. Take their structure and turn it back on them. 5 days to payout. $5,000 max payout. My daily profit goal (or minimum target) is $1,000. The message here is come with a plan of attack. There has to be some thought outside of trading directly that deals with prop firms and incorporating their details into your execution. Connect the two together.
Personally, I sized into my winning trades. I added more size into my higher confidence trades. Allowing them to run for longer duration. My average trade duration for winning trades was 2 hours. Letting good entries play out. Trends trend. Sizing into winners. Cutting losers before they dealt damage into the balance.
Win Quicker.
To speak from the other lens.
You have to win quickly. If you really want to rack up a really nice payout, you have to push. You are going to need some outlier days. You are going to need to catch some larger intraday moves. You are going to need to ultimately get “lucky” on trade outcomes. You really need positive variance to get into this position. But remember you only get so much time. There is a fixed amount of time you can spend in the XFA stage when you are winning. You can only take so many payouts. You could only have so many profitable days before you are moved. So? Take massive risk and hope to get lucky? The quicker your profits come the quicker they often go. This is true, Prop firm risk managers know this, so they hesitate to move winners to live. They want you to lose it all. Remember the insurance analogy. They are the insurance company that doesn’t want to pay out the claim.
When I got my caps raised, do you think Topstep did it out of the kindness of their heart? They said we want to give this guy extra money? No. They don’t expect you to know how to scale a balance and do it emotionlessly without giving it all back. They are waiting for that one day when you give it all up.
If you look at my equity curve chart, it reflects this perfectly. Build a scalable starting balance the first few days. Increase sizing in confident trades. Large single day profit days allowing you to raise bet size over weeks to max size. In a way, payout caps became targets for me. 50k cap raised to 75k? How can I grow this 50k balance to 75k sustainably over the next x amount of days before my next payout? You don’t want to leave money on the table. Pushing towards those profit caps was ideal because it “forces” their hand. They either have to move you to live or increase your caps. They moved me after 4 payout cap raises.
Live Account.
Since the recent change to the live account structure, I have adapted my advice. Under the previous rules with XFA winning days carrying over to your live account and counting, you could still apply a similar daily strategy to the XFA stage. This is what I would typically would do. I was given a $3,000 daily loss limit and 5 contract limit. Essentially giving me 30 points of risk per day. I would look to leverage that 30 points into 40 to 50 points of risk using shorter quicker “scalps”. Then, use that added buffer to take 1-2 trades on max size (5 minis).
With the current rules, I would advise against that entirely. Stack your base hits and walk away. Take a single trade to pass the minimum requirement and lock up. You are not incentivized to trading your live account. Even considering performance bonuses, it doesn’t make sense. Using this time to work on a new firm is my suggestion.
It still is a trading account. You can still treat it and use it as one. If you are trading Topstep to open a live account, you should go open your own brokerage account. The live account transition is “beating the game”. It is at that point the firm says we want to further cover this person’s insurance because they are too high risk. That is the winning point. It is after that point where the firm puts you into another environment to better help cover their payout schedules. Wait 1-2 (maybe 3-4) weeks for a live account. Then, you have to get 14-30 “winning days.” The firm wants you to trade as long as possible with them in the Live Account.
PART II: KNOW THE PLAYERS