Topstep is a popular prop trading firm that offers traders the opportunity to prove their skills and earn real capital by completing the Topstep Combine. The Topstep Combine is a key component in Topstep’s evaluation process and acts as a gateway for traders to gain funding. However, in order to successfully pass the Combine and secure funding, traders must adhere to strict rules and guidelines set by Topstep. In this article, we will break down the essential Topstep Combine rules, helping you better understand the requirements and how to navigate through the process.
What is the Topstep Combine?
The Topstep Combine is a two-step evaluation process designed to assess a trader’s skills, risk management abilities, and trading discipline. The ultimate goal of completing the Combine is to earn a funded account where traders can trade with Topstep’s capital and keep a percentage of the profits they generate.
Step 1: The Evaluation Phase
In the first step, traders must demonstrate their ability to meet certain performance targets, including profit goals, daily loss limits, and consistency in trading. During this phase, traders have access to a simulated trading environment where they can use the same market conditions as they would in a live account.
Step 2: The Evaluation Continuation
Once traders successfully pass the first phase, they move on to a more advanced stage, where additional evaluation criteria, including trading psychology and consistency, are tested. This stage closely mimics real-life trading scenarios, as traders continue to meet the same rules and restrictions but with more flexibility.
Topstep Combine Rules: Key Requirements
Understanding and following the Topstep Combine rules is essential to ensure success. Traders must maintain discipline throughout the Combine, adhere to the parameters set by Topstep, and execute their trades effectively. Below are the primary rules and guidelines that traders must follow to successfully complete the Combine:
1. Profit Target Requirement
One of the fundamental goals of the Topstep Combine is for traders to reach a specific profit target during the evaluation phase. The exact profit target will vary depending on the trading account size you are applying for. However, generally speaking, traders must aim to achieve a profit of $2,000 to $5,000 or more, depending on the account size and trading strategy.
The profit target is designed to test a trader’s ability to navigate market conditions and capitalize on profitable opportunities. It is important for traders to focus on consistent profits, rather than aiming for large, high-risk trades that could result in significant losses.
2. Maximum Daily Loss Limit
A key component of the Topstep Combine is the maximum daily loss limit. This rule is in place to ensure that traders manage risk properly and do not make overly aggressive trades that could jeopardize the evaluation process. The daily loss limit is typically set at $1,000 for the standard accounts, though it can vary depending on the specific trading account.
The daily loss limit is calculated based on the net balance of the trader’s account, and it includes all realized losses from executed trades. If the account reaches this daily loss limit, the trader is immediately disqualified from the Combine, even if they are still within the overall profit target.
3. Maximum Drawdown Limit
Another important rule in the Topstep Combine is the maximum drawdown limit. This rule ensures that traders do not incur substantial losses beyond a certain threshold during the evaluation process. The maximum drawdown limit is usually set at $2,000 for smaller accounts but can vary depending on the trader’s account size.
If the trader’s account balance falls below the drawdown limit, they will be disqualified from the Combine. It is crucial for traders to exercise prudent risk management strategies to avoid hitting this limit and protect their capital throughout the evaluation process.
4. Trading Days Requirement
Traders must also meet a minimum number of trading days to qualify for funding. Typically, traders are required to trade for at least 15 trading days within a 30-day period. This ensures that traders are not only demonstrating short-term success but are also able to sustain a profitable trading strategy over time.
However, it’s important to note that the Topstep Combine does not impose a maximum number of trading days. Therefore, traders can take their time to achieve the necessary profit target, as long as they remain within the defined rules.
5. Consistency in Trading
Topstep places a high value on consistency in trading. While reaching the profit target is important, traders must also demonstrate the ability to stay disciplined and avoid impulsive trading decisions. Traders must show that they can stick to a consistent risk-reward ratio, manage their trade size, and avoid excessive overtrading.
This requirement is closely tied to the concept of trading psychology, which is often the deciding factor between successful traders and those who fail the Combine.
6. Risk Management Rules
Effective risk management is one of the cornerstones of the Topstep Combine. Traders must strictly adhere to guidelines such as:
- Position Sizing: Topstep limits the amount of risk you can take per trade, typically requiring traders to risk no more than 2% of the account balance on any single trade.
- Stop Losses: Traders should always place stop losses at appropriate levels to protect themselves from large, unexpected market moves. Failure to use stop losses may lead to disqualification.
- Max Contracts: Depending on the account size, there may be restrictions on the number of contracts or positions traders can take simultaneously. Adhering to these limits ensures proper risk management.
7. Trade Execution and Time Limits
Another key aspect of the Topstep Combine is the trade execution and time limits. Traders are not allowed to leave open positions overnight or over the weekend unless it is specifically stated in the rules for a particular account. Traders should also avoid holding positions in a way that can violate any of the established daily loss limits.
Additionally, there may be specific guidelines regarding the minimum and maximum duration for holding trades. For instance, traders should avoid making excessive trades during low-volume hours or taking positions during times of high volatility.
8. No Trading During News Events
In order to maintain a level of consistency and reduce market manipulation risk, traders are generally prohibited from trading during major news events or economic releases. This rule ensures that traders are not relying on unpredictable movements and are adhering to a disciplined approach to trading.
Topstep encourages traders to focus on technical analysis and market trends, rather than reacting to the inherent uncertainty that accompanies economic reports and market-moving news events.
Topstep Combine: How to Improve Your Chances of Success
While meeting the Topstep Combine rules is crucial for earning funding, the way in which you approach the Combine is just as important. Here are some strategies to improve your chances of passing the Combine:
- Risk Management: Never risk more than a small portion of your account on a single trade. Use stop losses effectively and ensure that you maintain a 2:1 or better risk-to-reward ratio.
- Trade Plan: Develop a solid trading plan and stick to it. A well-thought-out plan can help you avoid impulsive decisions that lead to excessive losses.
- Patience: Take your time to build your account and don’t rush toward hitting the profit target. The more consistent you are, the better your chances of succeeding.
- Discipline: Adhere strictly to the rules and never break them out of impatience. Disqualification due to a rule violation can set you back significantly.
Conclusion
The Topstep Combine offers traders a unique opportunity to prove their skills in real-world market conditions and access funding. By adhering to the Topstep Combine rules, including profit targets, risk limits, and trading psychology principles, traders can significantly improve their chances of success.
By following the provided guidelines and maintaining discipline throughout the evaluation process, traders can advance to a funded account and begin trading with real capital. Remember, consistency and proper risk management are key to passing the Combine and achieving long-term success in trading.
For further details, visit Topstep.