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Trading Education Posted by Team Topstep May 26, 2022

What Some Traders Learned Passing Step 1 of the Trading Combine®


Every trader who passes Step 1 of the Trading Combine® is given a chance to share some details of their experience with Topstep via video or email. Here are some of the greatest hits from the past few months. 

Kyle S. – Takeaways from Step 1

First, we’ll hear from Kyle S. What Kyle does here is not only break down his takeaways from Step 1, but he also lays out his plans for getting better in Step 2…

What Kyle learned in Step 1:

  • It’s okay to lose on the trade.
  • Respect the trend & have a stop loss. 
  • Don’t let a winner go red. Adjust to breakeven.
  • Don’t trade the overnight session.
  • Come prepared to the market. 

What Kyle will focus on getting better in Step 2:

  • Having patience with the trade.
  • Wait for confirmation of support or resistance before entering the trade for better risk management. 
  • Get better at trailing stops using higher time frames at new support or resistance.
  • Try not to overtrade.

To sum up, a few things Kyle learned in Step 1 are that it’s OK to lose on a trade as long as you respect the trend, set a stop loss, and don’t let a winner turn into a loser. It sounds like someone has been working with Coach Hoag…

Kyle plans to focus on getting better in Step 2: being more patient with trades, practicing better risk management, and trying not to overtrade. These are things we talk about every day here at Topstep. As difficult as trading is, the rules are pretty simple. 

Here’s a tip that we’ve shared in the past to help you avoid overtrading; start small and give your trades a little extra room to breathe. And when it comes to risk management, keep the math on your side; aim for at least a 2:1 reward/risk ratio, and never risk more on a losing trade than you would make on a winner.

Thanks for sharing, Kyle!

Joseph A. – Trading the Range

Here’s what Joseph A. has to say about what he learned about range trading in Step 1…

“Trading the range of the market, I started off jumping into the market too soon. Then I realized I was in the middle of the chop as time went on. Patience is key!”

Getting chopped up in a ranging market happens to the best of us. Remember, when you’re trading the range, upper and lower boundaries and risk and profit targets should be clearly defined.

Check out our Coach’s Playbook on Day Trading Range Strategies for some more insight on this topic from our coaches!

Wade R. and Natalie L. – Discipline

When it comes to trading discipline, Wade R. is figuring it out pretty quick…

“It took me a couple of tries to pass Step 1. When I first started, I wasn’t taking it seriously enough. I wasn’t following my trading strategy or my plan. That took two tries to break that habit.  

In my final attempt at step 1, I followed my strategy better. I did “practice” some scalping techniques that I’m trying to learn. For some reason, it took me two days of that before I realized I could do it with Micros instead of Mini’s. Either way, I followed my normal strategy and got in some good practice scalping without taking any bigger losses from the minis.

For a couple of days, I was up on the day and continued trading until I was down. I had a 500.00 daily loss limit in mind but didn’t hold to it. 

Lessons Learned: 

  1. Practicing the scalping didn’t really add anything to my totals. I should do that on sim until I get the hang of it. The setups worked well, but I didn’t have the discipline to take a small profit. I was disciplined on the stops but kept trying to get more on the target by moving it. I also found myself overtrading and taking trades that were not really set up according to my scalping strategy.
  2. Some setups have a larger stop. I could pass on those and reduce some risk. I find that it is difficult to analyze the stop properly in real-time. Sometimes my entry candle will move several tics/points in my direction at the last second I enter on the close of the candle, which puts my stop further away than I really wanted. I’m working on being more aware of that since I would like to skip some of those trades. 
  3. For some of the trades, I was using a $500 stop. This is part of my strategy. However, it’s more of a swing trade and a big hit to the account if it doesn’t work. So I will take this out of my strategy and work on lower-risk setups. The reality is that I make about the same amount, except it takes 2 or 3 trades instead of 1, and the individual risk on the smaller trades is generally around $120 instead of $500.
  4. The biggest lesson of all. I can do this if I focus on preserving my capital, follow my strategy, remain patient, and continue to learn from mistakes.”

Wade went on to say, “my setups worked well, but I don’t have the discipline to take a small profit.

We hear you, Wade. Remember, not every trade will be a home run, and playing small-ball will keep you in the game to trade another day. 

Another trader, Natalie L., also said…

“One of my biggest issues is learning to take profits when they present themselves, even if they are not what I expected. This is something I am still working on and is a challenge to me.”

Every trader has their own rules for taking profits, but try out the 10% rule for starters. When the market gets within 10% of your profit target, set a timer for 10, 15, or 20 minutes, whatever your typical trade timeframe is, and if your profit target doesn’t get filled by the time the buzzer rings, just exit at the market and move on to the next trade.

I hope you all found these comments and insights helpful. We plan to keep sharing the feedback our traders provide to us with all of you, so keep an eye out for more!

Trade Well!