Topstep Changes the Rules!!! Path to Live Funded Account Review

Summary

In this video, JC dives into the evolving landscape of prop trading firms, focusing on recent rule changes that affect traders' ability to manage multiple accounts and claim payouts. He explains how firms like TOP Step and Apex are tightening their policies to maintain sustainable payout structures, particularly for profitable traders. While prop firms offer great opportunities for new traders to learn and earn, JC emphasizes the importance of understanding the risks involved, especially with changing rules and business models that prioritize trader failures for revenue generation. His insights provide a crucial perspective on the future of the prop trading space.

Takeaways

• 😀 Prop firms like TOP Step are tightening rules, limiting traders to one live funded account at a time, compared to the past where traders could manage multiple accounts.
• 😀 Prop firms rely on a business model that thrives on new traders joining and failing, generating revenue from account activation fees and evaluation costs.
• 😀 Profitable traders create a sustainability issue for prop firms, especially those who trade multiple accounts, as firms now limit payouts to mitigate the risk of too many successful traders.
• 😀 Prop firms are tightening their payout and risk management policies, particularly for traders who manage large numbers of accounts, potentially denying payouts based on internal reviews.
• 😀 The industry is increasingly shifting toward more stringent rules and terms of service, with firms like TOP Step including disclaimers that they can deny payouts for virtually any reason.
• 😀 For traders aiming to move into live funded accounts, it's important to recognize that the path to live funding is not guaranteed, and firms often use these opportunities as marketing tactics.
• 😀 Diversifying across multiple prop firms and maintaining fewer accounts with each firm may help traders avoid scrutiny and manage risk, ensuring consistent payouts.
• 😀 Prop firms, including TOP Step and Apex, are evolving to better control the payout process, which could lead to the introduction of stricter regulations and fewer opportunities for traders with large equity balances.
• 😀 The prop firm industry remains largely unregulated, meaning traders should be prepared for sudden changes in terms of service and should only risk what they are willing to lose.
• 😀 Although TOP Step has tightened its rules, it still remains one of the most reputable and reliable prop firms, offering fast payouts and established credibility in the trading community.

Q & A

What is the main reason for the tightening of rules by prop firms in 2024?

The main reason for the tightening of rules is the sustainability issue for prop firms when managing multiple funded accounts. As traders become profitable, the payouts increase, placing a financial burden on the firms. To address this, firms like TOP Step are limiting the number of accounts available for traders to manage.

What happens to the equity in Express funded accounts under the new rules?

Under the new rules, any equity in Express funded accounts will be moved into the trader's live funded account once they meet certain thresholds. This change limits the flexibility that traders had before, where they could manage multiple accounts with different equity levels.

Why is managing 20 accounts not considered sustainable for profitable traders?

Managing 20 accounts can lead to massive payout requests, which are not sustainable for prop firms in the long term. Prop firms rely on a cycle where new traders pay activation fees, blow their accounts, and then rebuy. This model becomes strained when traders remain profitable across multiple accounts and request large payouts.

How do prop firms generate revenue from traders?

Prop firms generate revenue primarily through fees that traders pay for account activations and reactivation fees when accounts are blown. The firms rely on a continuous cycle of new traders, many of whom will lose their initial investment, providing a steady revenue stream.

What does the host suggest about the future of prop firms and trader payouts?

The host suggests that prop firms will likely continue to tighten their rules around multiple accounts. They may limit traders to fewer accounts, possibly one or two, to reduce the financial burden on the firms. This may lead to fewer opportunities for traders to leverage multiple accounts for large payouts.

Why should traders be cautious about relying on prop firms for long-term success?

Traders should be cautious because prop firms are built on a business model where their profitability is tied to the losses of traders. While prop firms offer opportunities for payouts, they are ultimately businesses focused on revenue, and there are risks involved, including the possibility of payouts being denied or the firm going out of business.

What is the host's opinion on TOP Step as a prop firm?

The host believes that TOP Step is one of the better prop firms, offering fast payouts and a strong brand in the market. However, the host also notes that they have been tightening their rules, making it more challenging for traders to manage multiple accounts, and suggests that traders should always be aware of the risks involved.

What does the host mean when referring to prop firm trading as 'playing a video game'?

The host is referring to the comparison made by FastTrack Trading, where they likened trading with a prop firm to playing a video game. In this analogy, traders are essentially 'playing' to earn payouts, but the system is designed in such a way that the trader's losses contribute significantly to the prop firm’s revenue, similar to how video game companies make money from in-game purchases or subscriptions.

How does the host recommend traders approach prop firms in 2025?

The host recommends that traders in 2025 should carefully consider how many accounts they want to manage and whether it’s better to focus on a few high-quality accounts rather than many smaller accounts. Diversifying across multiple firms with a small number of accounts could also help traders stay under the radar and avoid having their payouts scrutinized too closely.

What should traders do if they want to minimize risk while using prop firms?

Traders should use prop firms as a learning tool and a way to build their personal accounts over time through payouts. They should only risk what they’re willing to lose and avoid depending entirely on the firm for long-term financial success. It's important to understand the business model behind prop firms and stay informed about any changes to their terms and conditions.