Author: Eduardo Montero
Last Updated on January 3, 2023
Topstep is a futures prop trading firm with more than 10 years in business since its founding in 2012. According to INC5000 list Topstep is one of the 5000 fastest growing US companies, ranking #1419 (at the time of writing).
These results come with an excellent reputation, especially for the services it provides to its clients. From Chicago, USA, this proprietary trading firm, previously known as TopstepTrader, has financed thousands of traders from more than 160 countries, to whom it has distributed millions of dollars in profits along the way.
Among its main features, we can highlight its profit split scheme in which you keep 100% of the first $5,000 USD you generate and 90% from that amount.
The founder of Topstep, Michael Patak, created this company with the conviction that everyone deserves a sensible trading environment to be able to exploit their full potential, this after going through numerous failed attempts to be a successful trader.
Currently Topstep only offers funded accounts for trading in the Futures market, since April 12 of 2022 ceased to offer Forex to new users, and thus focus solely and exclusively on financial futures.
To become a Topstep funded trader, you will have to pass a two-step initial evaluation process called “Trading Combine”, which you will have to pay monthly, where the cost will be $165 for accounts with $50 000 in buying power, $325 for $100,000, and $375 for $150,000. A 20% discount is currently available on these prices. More info at https://www.topstep.com
As mentioned above, the payment to access the Topstep evaluation process is recurring on a month-to-month basis. At this point it is worth noting that Topstep does not impose a maximum time limit for completing the assessment but charges you monthly until you pass the evaluation.
To pass the test, broadly speaking, what you need to do is demonstrate that your trading strategy can be consistently profitable and that you can manage risk appropriately.
Is Topstep legit and reliable?
Throughout our research we found no information regarding regulations or licenses held by the company, but this does not mean that it is not a reliable prop firm, as with its long history of over 10 years, it has proven that it pays its funded traders month after month!
On the other hand, Topstep is located in the United States, a country that is quite rigorous in terms of investment, so this simple fact is a point in its favour in terms of security.
According to its clients, it is a very transparent proprietary trading firm, with a real office address:
Address: 224 N. Des Plaines, Suite 350, Chicago, Illinois 60661
Topstep phone number: (888) 407-1611
Therefore, for any extraordinary situation you have the possibility to go to their offices, or simply contact one of their agents at the phone number.
It is also important to note that Topstep has been featured in media such as Forbes, CNBC, Fox Business, Barron’s, Market Watch, among others, another point in favour of this prestigious prop firm.
Another way to measure the reliability of this company is to check the opinions of its users:
What are the opinions of Topstep users?
There are many opinions from Topstep users. If we focus on the number one platform in this regard (Trustpilot), we will find more than 1300 comments of which 74% are ratings that give the company 5 stars, while only 10% of the total are comments of 1, 2 or 3 stars.
As you can see, the final score is 4.4, a very positive number considering the number of reviews it has, and perfectly logical considering how many of them are 5-star reviews.
But let’s go beyond a simple score, let’s take a look at some of the most outstanding comments left by Topstep customers on the Trustpilot platform.
In this review, Bradley tells us that Topstep has been the best thing he has found in 10 years, and that this prop trading firm is one of the best opportunities for traders with little money who would like to be funded traders and thus earn a higher income.
In addition, we can appreciate that his experience with the customer service has been satisfactory, categorising it as incredible.
Joseh believes that this proprietary trading firm is good for traders because the rules it imposes make traders manage risk more efficiently.
Galo Juca says the website is great for learning to take control of your emotions in your trading, to be more disciplined and aware when trading.
In the case of James, who also comments on Topstep’s customer service, he says he has had an excellent experience in getting detailed answers to his concerns quickly.
Manuel, although he rates the firm 4 stars, says he found some bugs in the charts displayed through Tradovate, which is why he does not give it an excellent rating.
This Topstep user disagrees with a specific rule in phase 2 of the Trading Combine, specifically the one about the one-day profit target limit, which he classifies as stupid.
But it’s really just his opinion, not everyone feels the same way, as we have seen comments giving 5 stars to the rules imposed by this proprietary trading firm.
How does Topstep work?
How does the Topstep programme work?
Topstep, unlike other firms such as My Forex Funds (view My Forex Funds Review), offers a unique program called Trading Combine, with three different account sizes, which as mentioned above have a monthly recurring cost, more or less high depending on the size of the account.
The programme is simply a demo account, i.e. a simulated account, in which you can trade with the account size you choose and pay for.
The process consists of 2 phases, which you can pass in at least 15 days, before you can be funded with real money.
The first phase, lasting 5 days, is where you will have to demonstrate that you have mastered the fundamentals of trading and risk management by actively trading these days, but not only that, you will also have to reach the profit target set by the company by using the correct maximum position size.
At the end of the first phase your account will be audited through the account’s trading reports, and if you pass the first phase you will receive an email from Topstep confirming that phase 2 is active.
The second phase is more focused on best practice, as you will need to demonstrate profitability, consistency, and the ability to manage the risks associated with trading over a longer period of time, at least 10 days, while following a set scaling plan.
Therefore, you must actively trade for these 10 days (which do not necessarily have to be consecutive) and reach the new profit target without violating the scaling plan, which determines the number of contracts you can trade based on your total account balance.
As such this is how the Topstep programme works, you will have to meet the targets, pay the monthly fee, and comply with the rules.
However, each phase of the programme can be restarted or reset, restarting with the same initial conditions and metrics from the phase that was restarted. At this point it should be noted that each restart has a cost of $99 in addition to the monthly cost of the programme.
Regarding the monthly recurring payment, you should know that when you reach the objective of the test, you will stop paying this fee.
Topstep Pro Account
After completing the Topstep Trading Combine evaluation process you can access the Topstep Pro Account if you need it. This is a transition account to a real funded account but in a simulated environment. It has a profit target of $5,000 (or $2,500 for Swing Trading Combine where the maximum position size is 5 Micro Lots) to be achieved in a maximum of 90 days and the rules are similar to those of the Phase 2 of Trading Combine. The profits you make are simulated and not withdrawable. The aim of this Pro Account is to minimise the negative psychological impact for some traders of switching from trading with fictitious money to managing an account funded with real money. If you break any rules while using the Topstep Pro account you will revert to phase 1 or phase 2 of Trading Combine depending on whether the balance was lower or higher than your initial account balance.
Topstep Rules to comply with
Some rules established in the evaluation phases of the Trading Combine programme remain in place even after you are funded, especially the risk management rules.
So, the rules to comply with are that:
- You will have to follow the scaling plan, where the number of contracts you can trade will depend on the available account balance
- You cannot exceed the daily loss limit set at 2% of the total balance.
- You may not have a loss of more than 4% of the total capital.
- You will not be able to trade during important news or events
Topstep trading hours: Positions are not allowed to be held on trading days between 3:10 p.m. and 5:00 p.m. Central Time on Trading Combine accounts (in Swing Trading Combine is allowed ). Some futures markets close before 3:10 p.m. Central Time. If you are trading one of these products, you must exit that market before the daily close of the products. You should also take into account the days considered holidays according to the CME Protocol.
More info about the Topstep rules an trading hours at https://www.topstep.com
Available financial instruments
Previously, Topstep offered the option to choose whether you wanted to trade currency pairs (Forex) or Futures contracts. However, as of 12 April 2022, the Forex option has been removed to focus solely on the Futures market.
Futures are a complex financial product, but less manipulated than Forex, so making profits in this market (if you know how to trade it) will be much easier.
This shows that the owners of Topstep are committed to offering the best trading conditions for their clients, which is logical considering that if they win, the prop firm wins.
The following image shows some of the products that are currently available at Topstep.
At Topstep they take risk management very seriously, and consider it bad practice to over-leverage. For this reason the maximum leverage you can use with this prop trading firm is 1:100, which is even higher than other of the best prop firms that only allow 1:10 or less.
With Topstep you can choose from a wide variety of platforms, some paid and some free, including TradingView, NinjaTrader, and TSTrader (Tradovate), all of which are recommended by this proprietary trading firm.
There are other platforms that you can also use to trade Topstep accounts, such as:
Of these, the most popular for futures trading is NinjaTrader, a platform with excellent performance and security.
Now, as you may have seen in the images above, some of these platforms are free of charge, but others are not, so you will have to pay for their use regardless of the cost of the Trading Combine.
In the case of TSTrader, the firm Topstep offers a one-time 14-day free trial if you are new to the program.
Topstep scaling plan
Starting at phase 2 of TradingCombine, and staying at the funded account stage, the scaling plan sets a standard or rule that cannot be violated and is important for you to be aware of, as failure to comply with this plan is grounds for suspension of the TradingCombine trial or funded account.
So what really is the Topstep scaling plan?
Well, this plan refers to the size of the trades you make in both the trial and funded stages, the size of which will be defined by the available balance in the account as appropriate.
For example, for the $50,000 account, you will be able to trade up to 2 lots if the account is below $51,500, if it is between $51,500.1 and $52,000, you will be allowed to trade 3 lots on the same day, while if it is above $52,000 the volume allowed increases to 5 contracts (lots).
The image below shows the scaling plan on all Topstep funded accounts:
One important thing to note is that 1 lot of a micro asset (MES) is considered a full size lot in the same way as 1 lot in a normal product (ES).
The size set by the scaling plan is a maximum volume, so you can trade less than the allowed amount in a single day without breaking any rules.
On the other hand, to move to the next contract number even if your account has exceeded the threshold of the next level, you must move to the next trading day in order to be able to use more buying power in your trades.
To be sure of the number of lots you can trade in a session, Topstep recommends reviewing the trading report each day after it is updated at 5 PM CET. To see the exact amount you can trade in the next session you can go to your dashboard in the “Rules”section.
According to Topstep, errors in the scaling plan do not violate the rules if they are corrected within 10 seconds, in case you enter an unallowed number of contracts, so it is important that you are careful about this.
Scaling plan on the funded account
In Topstep’s funded accounts, unlike the Trading Combine, to upgrade to the next level you will have to send an email to the company’s funded account specialist.
Moreover, once your profits on this account exceed the first $5000, you will be able to request adjusted risk parameters and potentially trade more lots than your original maximum position size.
How does Topstep profit split work?
Profit split at Topstep is quite clear and simple, after generating the first $5,000 of profits, which will be entirely yours, from that point onwards the profits will be shared in an 90/10 ratio, where the most profitable will be the trader, who will take 90% of the profits generated, without taking any losses.
If we compare this percentage with other proprietary trading firms, we can say that this distribution ratio is above average.
For example, in SurgeTrader (view SurgeTrader Review) the percentage of profits you will take will be 15% less, being only 75% of the profits, while in My Forex Funds, after 2 months, you will receive 85% of everything you can generate. Profit sharing in FTMO is 80% by default and 90% in accounts participating in the scaling plan (view FTMO Review).
Withdrawal of profits
On Topstep funded accounts, traders will be able to request a withdrawal of up to 50% of the account balance after accumulating 5 winning trading days, where a winning day is defined as having accumulated a profit equal to or greater than $100.
These days are accumulated as a cumulative total between requests, therefore they do not need to be consecutive days.
Therefore, before making each withdrawal request you must have accumulated the 5 winning trading days, otherwise you will not be eligible to make the request.
Let’s look at an example to help you understand better.
A trader starts his funded account with an account balance of $0, trades 8 days, of which 5 were winning and reaches an account balance of $4000.
In this case this trader will be able to request a withdrawal of up to 50% of these profits which equals $2000 USD.
After this withdrawal the trader continues trading with $2000 balance, and once he has achieved 5 more winning trading days, he again has the possibility to withdraw up to 50% of the profits.
As for the payment methods available to Topstep traders, we can mention:
- ACH Wire (for traders with a US account)
- Standard Wire Transfer
When a withdrawal request is requested and approved, the funds will be removed from the funded account, and from that point the funds will be processed and sent to the trader, which will take between 7 and 14 business days.
On the other hand, it is important for you to know that for standard bank transfers, for withdrawals of less than $500 there is a $50 bank transfer fee as Topstep will only cover the transfer costs if the amount is greater than $500.
Topstep’s tools and educational material
Topstep cares a lot about the financial education of its traders, that’s why they provide you with various educational tools and materials to help you improve and evolve as a trader.
These materials and educational tools include videos, podcasts and a blog with trading content, both risk management and psychotrading, all accessible free of charge.
The firm also has a Personal Coaching and Digital Coaching programme
The Digital Coaching programme (Coach T) is a virtual coach that will help you develop solid trading habits to achieve the highest possible performance.
With this coach you will have to establish a measurable plan that you can be accountable to at the end of the trading day, so you will know if you are sticking to the plan or not.
On the other hand, with this virtual coach you will have personalised data available on your trading behaviours, which will help you improve every day.
On the other hand there is the Personal Coaching or Performance Coaching programme, which will provide you with:
- Monthly 30-minute sessions with a personal coach
- One free combined trading reset per month
- Direct telephone access to the coaching team, Monday to Friday from 8:00 am to 3:00 pm.
Unlike Digital Coach, this Personal Coaching does cost extra, which will be $195 per month if you are on Trading Combine, but will be completely free if you pass the trial and become a funded trader.
Topstep also offers a free trial account that will be available for 14 days from the time you sign up. It is not extendable in days of use and no more than one trial account is offered per customer.
Topstep Customer Support
Currently the customer support at Topstep can be improved as they do not have a 24-hour live online chat for new users. Only available at certain times of the day. If you have any questions or problems, support can be reached via email or phone.
According to their customers, the customer service of this proprietary trading firm is quite good, and they receive the solution to their problems or questions in a short time.
Topstep is in a period of growth and evolution. If they are growing it means that they are doing a lot of things right and have features that attract new customers every month, on the other hand even if they have more than 10 years of experience as prop firm, they have to adapt to new standards to keep their competitiveness, so they have things that could be improved.
Let’s see below the advantages and disadvantages of this Proprietary Trading company.
Pros of Topstep
- Prop trading firm with over 10 years of experience and excellent reputation.
- Generous profit split scheme, where you keep 100% of your first $5,000 USD and 90% of everything you earn thereafter.
- Positively rated customer service department.
- Relatively high leverage compared to other similar prop firms (up to 100:1).
- Free training and coaching programme to help you build good trading habits and increase performance.
- Wide range of platforms available including the popular NijaTrader.
- 20% discount offer (no code required) on the purchase of your first funded account.
Cons of Topstep
- Has stopped offering Forex trading to focus solely on the Futures market, so if you are a currency trader this prop trading firm will not be of any use to you.
- The set of rules are not particularly complex but they can vary from account to account and you should check them out on the Topstep website. There is a lot of information in the “Help Center” section.
- Two-stage evaluation process with a monthly recurring payment, so if you don’t complete it within a month, you could be accruing monthly fees.
- For withdrawals of less than $500 there is a $50 wire transfer fee as Topstep will only cover the cost of transfers of $500 or more.
Topstep’s main differences from other prop trading firms
The above picture shows what this prop firm believes makes them different, but in our view we believe there are a couple of other things that also make them different from others, such as:
- There is no consistency rule, so your strategy can be more flexible than at other proprietary trading firms
- The trailing drawdown is calculated at the end of the day during the test, so it doesn’t matter if you violate the rule during the course of the day, as long as you end up with stocks that do at the end of the daily session.
As a result of all our analysis, we can see that Topstep is suitable for traders who already have a profitable strategy but are unable to achieve sufficient profits due to lack of capital, as long as you are not a Forex trader, since as we have mentioned on several occasions, only Futures are available.
However, we do not recommend it for inexperienced traders as it requires a great deal of skill to comply with its trading rules. However this does not mean that it is unattainable for them, they just have to prepare themselves by using the resources that the company itself makes available, and make use of the demo account that it offers, bearing in mind that it will be free for only 14 days.
If you are interested in a prop trading firm with instant funding and no evaluation or challenge we recommend you take a look at this listing: Best instant funding prop firms (no evaluation).
You can find out more about Topstep and open an account with them via their official website:Visit Now