After winning the Topstep Trading Combine challenge, the traders will get a Topstep funded trading account where they will get to trade with funds provided by the firm, and as they make profits, they will be getting their due share. The firm uses a profit structure, a part of the contract the trader will sign once the funded account is provided.
How Do Payouts Work At Topstep?
Payouts at Topstep are based on the withdrawal policy, which states that traders are eligible to withdraw up to half of their account balance (50%) for the Funded and Premium Funded accounts after generating five winning trading days for each withdrawal request.
What is the profit split at Topstep?
The trader will access the profits for the first $5,000 made in profits. However, subsequent profits are then shared in the ratio of 90:10, in which the trader gets 90% of the profits requested for withdrawal, while the remaining 10% belongs to the firm.
The profit split is one of the reasons that makes Topstep one of the best funded trading programs in the market.
When can I ask for a withdrawal at Topstep?
As we said earlier, traders can make the first withdrawal after five winning days. And this is the same for the second withdrawal, the third, and so on.
But traders must be aware that after making the first withdrawal, the trailing drawdown will be set automatically to $0.
Imagine that the trader made only $1000 in an account where the trailing drawdown is set at $2000 below the initial account balance. If he asks for a withdrawal (50%) of the profit, his account will be $500, and the drawdown will be set at $0. So now, the trader can’t lose more than $500, or his account will be eliminated.
To avoid that, traders need to attain the corresponding level of profits based on the size of their accounts. This will enable the trader to maintain the account for a lengthy period and make steady withdrawals.
This a video from Topstep that explains in detail when you should or shouldn’t make take withdrawals at Topstep:
What is a winning day at Topstep?
A winning day at a Topstep-funded account is when the trader makes a profit of $100 or more.
Under the withdrawal policy at Topstep, once a trader has a day in which the net P&L is equal to or more than $100, it counts as a winning trading day.
How can I request a withdrawal at Topstep?
Traders can request a withdrawal by contacting the Topstep support team via a form on the firm’s website. Once the withdrawal request is approved, the funds will be deducted from the live account of a trader, after which the process of disbursing the funds will begin through the trader’s requested payment method. The disbursement can take anywhere from 7 to 14 business days.
The firm processes withdrawals via the following methods:
- ACH Wire: this is a form of bank wire transfer for traders that own a US-based account, even if they are not residing in the US. ACH transfers do not feature fees; the bank account must be registered in a trader’s name.
- Standard Bank Wire: This is for traders who have accounts with banks outside the US, and such traders must make their bank information available via SWIFT format so that funds are transferred successfully. Unlike ACH wire transfers, standard wire transfers come with a transaction fee of $50 if the transaction is less than $500, but the transfer fee does not apply to wire transfers exceeding $500. For traders not based in the US, the standard bank wire is the fastest and most efficient means of making withdrawals, and as expected, the account must be registered in the trader’s name.
It should be noted that the firm cannot transfer money from the Funded Account to a personal trading account that the trader owns, and neither can the firm process withdrawals via PayPal.
What tax form to fill out for Topstep?
Every trader must fill out a tax form with the firm, as mandated by the Internal Revenue Service (IRS), that the company obtains specific information before paying any money to a vendor (A Funded Trader). There are two types of tax forms that traders are eligible to fill out, namely:
- W-9 form: for traders that are either citizen of the United States but are located anywhere in the world or traders that are not US citizens but are residing in the United States.
- W-8BEN form: for traders that are not US citizens and are located anywhere in the world apart from the United States.
What is the difference between withdrawing from the Funded Account® & Premium Funded Account®?
Withdrawing in Topstep Funded Account®
In a Topstep Funded Account®, the starting account balance is $0, and once traders accumulate the required five winning trading days, they can withdraw 50% of the profits. At the same time, they continue trading with the remaining gains. Once they accumulate another five winning trading days, they can withdraw another 50% of their profits.
Withdrawing in Topstep Premium Funded Account®
The withdrawal process in the Topstep Premium Funded Account® is almost similar to that of the Funded Account, except that the starting balance is $5,000 instead of $0, which might make it easier to attain the profit target that will make the trader eligible for withdrawal.
Once a profit is made that exceeds the starting balance of $5,000, the trader can make a withdrawal of 50% of the total funds accumulated. At the same time, the remaining is used for trading until another five winning trading days are generated, so the trader becomes eligible for withdrawal again.
More information about Topstep Withdrawals
What happens if a rule is broken?
When a rule is broken in the account, the trader will be eligible for profits exceeding the account’s starting balance. This means that if a rule is broken and the trader does not have profits exceeding the account’s starting balance, a withdrawal will not be possible as the trader will receive no payouts.
If the broken rule occurs in a Premium Funded Account and the balance falls below the account’s starting balance, Topstep will take back ownership of the remaining funds. Furthermore, suppose the account gets closed due to three months of inactivity or a voluntary request for a trader’s account to be completed. In that case, the profits over the starting balance will be given to the trader.
What happens to the trailing drawdown after I withdraw?
After withdrawing, the Topstep trailing max drawdown will be set to $0. That is the standard procedure after any withdrawal is made.
What happens to the scaling plan after I withdraw?
Withdrawals tend to significantly impact the leverage a trader has, as well as the amount of risk that such a trader can undertake. As a result, the scaling plan determines how withdrawals affect a trader’s account. For example, if the withdrawal made by a trader causes the Topstep scaling plan level to drop, then such an account will be adjusted to the buying power that corresponds to the new scaling level. Therefore, withdrawing can reduce the number of contracts available to a trader for trading.