SIM Trading or Bleeding Money? Experience Capped Risk

Published on: August 05, 2021

I’d like to go over what I consider a big value to traders in services like Topstep Trader that isn’t discussed much but for many, is a way to get out of the destructive SIM reset cycle without losing your savings.  

Jigsaw has been a “friend of Topstep” from their early days. When I meet people in the industry online, I like to meet them in person to feel them out (I have trust issues), so I flew out to Chicago to meet them way back in 2014. That included a tour of the CME trading floor with John and Mike. During that tour – it became clear that people all over the floor knew and liked Mike and John. Mike showed me it was possible to throw a Trading Card 15 meters and hit a guy he knew square on the back of the head with it. 

You can’t fake that – it takes pratice.

I came away from that time spent with the team that their service was beneficial and that they were legit. I was comfortable being on their show, blog and telling people about them.  Trader funding has now grown into a mini-industry; growing from Mike Patak’s idea.

Anyway – as mentioned, I think their trading combine has a value that isn’t discussed much. You get some skin in the game but your risk is capped to the combine fees.

So – what does that mean?

SIM accounts are problematic for many. It’s simply too easy to misbehave on SIM, reset the account and tell yourself you “won’t do that again”. Only you see it. I often get people asking me to delete accounts from Journalytix so that these blown-up SIM accounts are not staring them in the face when they use Profit Seeker or the Calendar. They don’t want to even look at that blown-up account. They want it to disappear faster than a politician’s emails.

On the other hand, live accounts should not be traded until you have a high certainty you will be profitable. I have seen people incur massive losses by going tilt on a live account they weren’t ready to trade. I always advise people to do what prop firms do – set a performance target on SIM over a period of time and if you hit it – you go live. That’s what prop firms do.

Here’s another way to think of it. Let’s say a friend approached you and said “I need money to trade, I’ll split the profits with you if you fund me, I’m not live or profitable but I think I can be”. What would that friend need to show you for you to give him your money? That’s your target.

What I like about Topstep is the fact it sits in a space between SIM and Live. You are accountable. You have actual risk but it’s capped to the amount you paid for the combine. You can’t lose massive amounts of money and you can’t behave badly and reset it.

Putting funding to one side – I think this represents a way to have something on the line but not everything on the line. You have risk but not too much. Somebody is watching and you need to trade to rules. 

Now – if you are renewing a combine account every 2 days – I don’t think it’s for you. But if you have discipline issues on SIM, where there is no risk, this is a great way to iron out those wrinkles. It is both carrot and stick. The carrot is the funding, the stick is the reset fee. You need both to be close to live trading.

Of course – you could ask your spouse/partner to provide oversight – but that’s an idea that never took off.

It’s Topstep’s 9th Birthday now and they are offering a pretty big discount of 30% off combines and your renewals for up to a year.  That takes a $150k combine from $375 to $262 and the $50k from $165 to $115 and your renewals get the discount too.

The offer expires on August 10th. 

If you have discipline issues but aren’t ready for live, I really do think this is a good bridge between the two. Of course – the funding is the icing on the cake but to me – the Gold is in the oversight and risk.