TopStep Review: Is TopStep a Scam or a Good Proprietary Trading Firm?
In the realm of trading, especially for aspiring traders and professionals seeking to amplify their capital without risking their own, prop trading firms have become a beacon of hope. Among these, TopStep has carved out a significant presence, promising traders the opportunity to showcase their skills, earn profits, and grow within a structured environment.
Yet, in an industry frequently marred by skepticism and scams, it’s only natural to ask: Is TopStep a legitimate, trustworthy firm or just another impostor? As a seasoned finance writer and industry observer, my goal with this review is to dissect every aspect of TopStep — its business model, reputation, pros and cons, and ultimately, whether it’s a suitable platform for traders looking to thrive.
Let’s embark on a comprehensive journey to explore what TopStep offers, how it works, and whether it’s a good fit for your trading ambitions.
What Is TopStep?
TopStep is a proprietary trading firm that provides traders with the opportunity to trade live capital, using their own expertise, without risking personal funds upfront. Operating primarily around futures markets, particularly in indices and commodities, TopStep acts as an intermediary that evaluates trader performance through structured tests, known as trading combine or simulated assessments.
The Core Philosophy
At its core, TopStep believes in "trading for growth"—allowing skilled traders to access significant capital and share in the profits, while they provide the infrastructure, risk management, and funding infrastructure.
How Does It Work?
The basic workflow involves:
- Registration and subscription to their trading combine.
- Trading a simulated account under specific rules and targets.
- Achieving predefined performance criteria over a set period.
- Upon success, being funded with a live account and trading real money with profit-sharing agreements.
This model aims to separate qualified traders from unproven ones, ensuring quality and risk controls for all parties.
Is TopStep a Legitimate Company?
The first question many have is about legitimacy. Here’s what sets TopStep apart:
Corporate Background
Founded in 2012, TopStep is a privately held company registered and operating within the United States. It’s licensed and adheres to relevant financial regulations for the services it provides.
Regulatory and Consumer Trust
Though it is not a publicly traded company, TopStep maintains transparency through:
- Clear terms and conditions.
- Open communication channels.
- Established reputation within the trading community.
Customer Feedback and Market Reputation
Numerous traders across forums, social media, and review sites have shared their experiences with TopStep. While perspectives vary — as with any trading tool or platform — many traders report positive experiences, especially with the educational resources and funding opportunities.
Are There Any Scams or Red Flags?
Based on available information, no credible evidence suggests that TopStep is a scam. It operates transparently, charges subscription fees similar to other educational and testing platforms, and pays traders their earned profits without issues — when guidelines are met.
However, the industry is rife with fake profit-sharing schemes and fraudulent firms, so always ensure you’re operating through official channels.
TopStep’s Business Model: How Do They Make Money?
Understanding how TopStep earns is critical to assessing its legitimacy.
Revenue Streams
- Subscription Fees: Traders pay regular fees to participate in the trading combine. These vary depending on the plan, frequency, and account size.
- Trading Combine Fees: Participation in the evaluation process costs money, usually ranging from $50–$150 per attempt.
- Upselling Educational Content: Many trading firms generate additional revenue through courses, coaching, and resources.
- Profit Sharing & Funding: When traders meet performance criteria, TopStep funds live trading accounts, sharing profits with traders based on the agreement.
Cost to Traders
While TopStep offers the opportunity to trade with larger capital, it involves initial costs (fees for trading combines) and ongoing subscription plans to maintain evaluation status or funded accounts.
Is It Cost-Effective?
For traders, particularly those in the US, the costs are comparable or even lower than setting up a personal trading account, especially given the risk mitigation and profit-sharing structure.
How Does TopStep’s Trading Combine Work?
The trading combine is a simulated environment — an evaluation phase where traders demonstrate their skills under risk management and profit target constraints.
Step-by-Step Process
- Sign Up & Choose a Plan: Various plans are available depending on the account size and trading style.
- Trade the Combine: Traders execute trades, aiming to meet profit targets without breaching risk rules.
- Meet Performance Criteria:
- Profit target within a specified duration.
- No significant drawdowns or violating rules.
- Consistency and discipline matter.
- Pass & Get Funded: Successful traders are then offered a funded live account with real capital.
- Trade & Share Profits: As a funded trader, you keep a percentage of the profits, with rules that safeguard TopStep’s risk.
Rules and Rules Variance
Each combine has specific rules for:
- Maximum daily and total drawdowns.
- Allowed trading hours.
- Use of leverage.
- Trading instruments.
It’s vital to familiarize yourself with individual plan rules to maximize your chances of success.
What Are the Pros of Trading with TopStep?
1. No Need for Large Capital
TopStep enables traders to access significant capital without risking personal funds, making it an attractive route for talented traders who lack funds.
2. Risk Management Focus
Strict risk controls teach discipline and help traders develop safer trading habits—respecting drawdown limits and profit targets.
3. Flexible Evaluation Process
Multiple plan options allow traders at different skill levels and trading styles to participate.
4. Educational Resources
TopStep invests in trader education through webinars, community forums, and trade coaching.
5. Transparent & Structured
Rules and terms are clear, with no hidden fees or deceptive practices reported.
6. Profit-Sharing Model
Funded traders receive a fair percentage of gains, often higher than traditional trading accounts.
7. Supportive Community
An active trading community and customer support help traders exchange insights and resolve issues.
What Are the Cons or Challenges of TopStep?
1. Cost of Entry
Participation requires upfront fees, which may add up if a trader fails multiple combines. This can be discouraging or financially burdensome.
2. Stringent Rules
Risk parameters are tight, and violations often lead to account suspension or disqualification, which can frustrate traders.
3. Performance Pressure
Meeting targets within a limited time frame can be stressful, especially for novice traders.
4. Not a Guarantee
Passing the combine does not automatically translate to profitability; ongoing skill and discipline are essential.
5. Payouts & Profit Split
While profit sharing is generally fair, traders should carefully understand the payout structure — including fees, profit split, and potential penalties.
6. Limited Asset Access
TopStep primarily offers futures trading — whether this is a limitation depends on individual trading preferences.
Is TopStep a Scam? The Verdict
Based on current industry standards, client feedback, and regulatory transparency, TopStep is not a scam. It’s a reputable firm that offers a legitimate opportunity for traders to leverage funded accounts without risking personal capital outright.
However, success depends heavily on the trader’s skill, discipline, and familiarity with the platform’s rules. Like any trading venture, it’s essential to approach with the right mindset and thorough understanding.
Who Should Consider Trading with TopStep?
1. Aspiring Futures Traders: Those interested in futures markets, especially indices or commodities.
2. Traders with Disciplined Strategies: Traders confident in their risk management skills.
3. Eager Learners: Traders seeking structured evaluation and mentorship.
4. Budget-Conscious Traders: Those who want to avoid the high costs of personal account funding.
5. Traders Looking to Scale: Experienced traders wanting larger capital access without personal risk.
Who Should Avoid TopStep?
1. Traders Focused on Markets Outside Futures: Forex, stocks, or options traders may find it limited.
2. Traders with Less Discipline: Those prone to impulsive trading who might breach risk controls.
3. Traders Looking for Immediate Profit: As the evaluation process can be challenging and time-consuming.
4. Absolute Beginners: Who need more foundational training before participating.
Final Thoughts
TopStep is a legitimate, well-established prop trading firm that provides a valuable pathway for disciplined traders to access significant trading capital, develop their skills, and share profits. While it comes with costs and rules, these are transparent and designed to build safer trading practices.
Success with TopStep depends largely on individual effort, discipline, and realistic expectations. It’s not a get-rich-quick scheme, but rather an opportunity for dedicated traders to grow and profit within a structured environment.
If you are considering partnering with a prop firm, TopStep deserves serious consideration, especially if futures markets align with your trading style and goals.
Frequently Asked Questions (FAQs)
Q1: Is TopStep a trustworthy prop trading firm?
Yes, based on its history, reputation, and transparent policies, TopStep is a trustworthy firm. It has established a longstanding presence in the industry.
Q2: How much does it cost to participate in TopStep?
Fees vary depending on the plan selected, typically ranging from $50 to $150 for the combine evaluation. Ongoing subscription fees may apply for maintaining evaluation or funded accounts.
Q3: Can I trade stocks or forex with TopStep?
No, TopStep primarily focuses on futures trading, particularly indices and commodities.
Q4: What happens after passing the combine?
You are funded with a live trading account and start trading real capital, sharing profits according to the payout structure.
Q5: Is there a risk of losing money in TopStep?
While you are not risking your own money initially (during the combine), violating rules can lead to disqualification. Once funded, losses are limited by risk management rules.
Q6: How are profits split?
Typically, traders keep around 60–80% of profits, with the firm taking the remainder. Exact percentages depend on the specific agreement.
Q7: What if I don’t pass the combine?
You can retry the combine, possibly after paying another fee. Many traders attempt multiple times.
Q8: Is TopStep suitable for beginners?
It’s more suitable for traders with some experience or knowledge of futures markets and disciplined trading practices. Beginners should consider gaining foundational training first.
Q9: Are there any hidden fees?
No, TopStep is transparent about its fee structure. Always read the terms carefully.
Q10: How do I contact TopStep customer support?
Support is available through their website via email, chat, or phone. They also have a comprehensive FAQ and resource library.
This deep dive into TopStep aims to equip you with a clear understanding of its operations, benefits, and potential pitfalls. Always remember, trading involves risk — controlled, disciplined trading paired with realistic expectations is your best bet for success.