Topstep Rules Explained: Drawdown, Profit Targets & Time Limits (2026)

Topstep Rules Overview

Topstep is one of the oldest and most established proprietary trading firms in the futures market, founded in 2012 and headquartered in Chicago. Unlike many prop firms that charge evaluation fees upfront, Topstep operates a subscription-based model where traders pay a monthly fee for access to the Trading Combine evaluation platform and potential funding.

The firm specializes exclusively in futures trading — no forex, stocks, or cryptocurrencies. Topstep's core appeal is its emphasis on risk management and trader development. The firm doesn't rush traders into funded accounts; instead, it uses a structured evaluation process to assess consistency, discipline, and adherence to risk protocols before allocating capital.

Key characteristics:

• Subscription-based pricing (no evaluation fees upfront)
• Futures markets only (ES, NQ, CL, GC, ZB, ZS, etc.)
• Strong community with live trading rooms and mentorship
• One of the most transparent and consistent payout histories in the industry
• Manual trading only — no automated strategies, bots, or advisors

Account Types and Pricing

Topstep offers three Trading Combine packages, each tied to a specific account size. Pricing is monthly and covers access to the evaluation platform, live trading room, and coaching.

Important: These monthly fees are charged whether or not you pass the evaluation. If you take 6 months to achieve your profit target, you'll pay $990–$2,250 in subscription fees before ever trading with real capital.

Profit Targets

Topstep's profit targets are percentage-based, meaning they scale with account size. The targets vary depending on market conditions and are designed to test consistency and risk management, not just raw trading ability.

Phase 1 Profit Target (Evaluation Phase):

• For $50K accounts: Typically 10% profit target ($5,000 gain)
• For $100K accounts: Typically 10% profit target ($10,000 gain)
• For $150K accounts: Typically 10% profit target ($15,000 gain)

How Profit Targets Are Calculated:

Topstep uses a trailing high-water mark system. Your profit target is measured from the highest peak of your account balance during the evaluation period. If your account reaches $55,000 (starting from $50K), the target moves to $60,500. If you then drop to $54,000 and recover to $55,500, you have not achieved the profit target because you haven't surpassed the previous high of $55,000 by the required percentage.

This approach emphasizes consistent growth and prevents traders from using large losses followed by small recoveries to claim profits.

Drawdown Rules

Topstep's drawdown limits are among the stricter in the industry and are designed to enforce strict risk management.

Daily Drawdown Limit:

• 2% of your account balance per day
• Once you hit -2% in a single day, your trading is paused for the remainder of that trading day
• The daily loss resets at the open of the next trading day

Maximum Drawdown (Account Trailing Drawdown):

• 5% from the highest peak of your account balance
• This is a trailing high-water mark, not a static floor
• Example: If your account reaches $52,500 and then drops to $49,875, you've hit the 5% max drawdown and fail the evaluation
• If it rises again to $52,600 (new high), your drawdown limit resets to a new 5% level ($49,970)

Drawdown Reset Conditions:

• Daily drawdown resets at market open each trading day (typically 8:30 AM CT for US futures)
• Account drawdown resets when you establish a new high-water mark
• There is NO weekly or monthly reset — drawdowns are cumulative for the duration of the evaluation

Comparison Context: A 5% max drawdown is more restrictive than most competitors. FTMO allows 10%, while some newer prop firms allow 8–12%. This reflects Topstep's conservative risk philosophy.

Trading Restrictions

Markets and Instruments:

• Futures only: ES, NQ, CL, GC, ZB, ZS, YM, and other major futures contracts
• NO forex, stocks, cryptos, options, or micro contracts
• NO spreads unless explicitly approved

Position Sizing and Lot Limits:

• Maximum position size: Typically 10 contracts per trade (varies by account tier and market conditions)
• Maximum open positions: Usually limited to prevent over-leverage
• Scalping is permitted but must follow risk rules

Time Restrictions:

• Full US futures market hours: 5:00 PM CT Sunday – 4:00 PM CT Friday
• You may trade extended hours and globex sessions
• No restrictions on session length or number of trades per day

Weekend Holding:

• NO holding positions into the weekend
• All positions must be closed by end of Friday regular session (4:00 PM CT)
• Violating this rule typically results in immediate account termination

News Trading and Economic Events:

• No restrictions on trading around FOMC, employment reports, or other news events
• However, spikes in volatility around these times may trigger the 2% daily drawdown limit faster

Automated Trading:

• Automated trading, bots, and expert advisors are strictly prohibited
• All trades must be manually executed
• This is a hard rule — use of automation will result in account termination and forfeiture of any profits

Copy Trading and Mirror Trading:

• NOT permitted — each trader must trade independently
• Topstep monitors for suspicious patterns that suggest copying

Profit Split and Payouts

Profit Split on Funded Accounts:

• 100% profit split on the first $5,000 of monthly profit
• After $5,000: Split adjusts (typically 80% trader / 20% firm, but this varies)
• You do NOT keep profits earned during the evaluation phase
• Profits only accrue once you transition to a real-money funded account

Withdrawal and Payout Schedule:

• Withdrawals are processed monthly on a fixed schedule (typically the 15th and last day of the month)
• Minimum withdrawal: $100–$500 (depends on account status)
• Processing time: 3–5 business days via bank transfer or check
• Direct deposit is preferred and typically fastest

Monthly Management Fees:

• Once funded, you continue paying the monthly subscription fee ($165–$375)
• This fee is deducted from your trading profits, not from your account balance
• If you have a losing month, fees may still apply (check current terms)

Scaling Plan

Topstep's scaling strategy is more conservative than competitors and emphasizes long-term account growth and risk management.

Phase 1: Trading Combine (Evaluation)

• Trade on simulated account for 30–90 days (typically)
• Must achieve the profit target (10% gain) with daily and max drawdown adherence
• No real capital at risk during this phase

Phase 2: Funded Account

• Once you pass the Combine, you receive a real-money funded account at your tier size ($50K, $100K, or $150K)
• Profit split begins: You earn a percentage of all realized profits
• Account drawdown and risk rules remain the same as the evaluation phase

Phase 3: Account Growth (Scaling)

• If you generate consistent profits over 2–3 months, you may be eligible for account size increases
• Scaling is not automatic — Topstep reviews your trading history and risk management before offering larger capital
• Typical scaling: $50K → $100K → $150K+ over 6–12 months of profitable trading
• There is NO guarantee of scaling if drawdowns or losses occur

Long-term Plan:

Top traders at Topstep may eventually access accounts of $200K–$500K+, but this requires demonstrable consistency and a strong relationship with the firm.

Topstep Rules vs Competitors

Key Takeaways from Comparison:

• Drawdown Rules: Topstep is more restrictive (2% daily, 5% max) than FTMO and most competitors. This favors disciplined traders but makes scalping harder.
• Cost Model: Topstep's monthly subscription is higher than one-time evaluation fees, making it more expensive for traders who fail the Combine multiple times.
• Profit Split: Topstep's 100% split on first $5K is generous, but the secondary tier (80/20) matches competitors.
• Market Flexibility: FTMO and The5ers offer more instrument diversity (forex, crypto). Topstep is futures-only, which appeals to futures specialists but excludes others.
• Automation: PropCharts and The5ers allow limited automation; Topstep does not. This is a major differentiator for system traders.

Red Flags and Fine Print

1. Monthly Fees Are Non-Refundable

If you subscribe to the $165–$375 monthly package and fail the evaluation after 6 months, you don't get a refund. This can add up to $990–$2,250 in sunk costs. Budget accordingly.

2. No Guarantee of Funding

Passing the Trading Combine does not guarantee a funded account. Topstep reserves the right to decline funding based on additional reviews, especially if they detect rule violations or patterns they deem risky.

3. Withdrawal Delays During Market Stress

During high-volatility periods (earnings season, Fed decisions, market crashes), Topstep has been known to temporarily pause or delay payouts. This is stated in the terms but often surprises traders.

4. Profit Resets on Violations

If you violate any rule (e.g., holding over the weekend, using automation, exceeding lot limits), you may be immediately terminated and forfeit profits earned in that cycle. There is no grace period.

5. Live Trading Room Access Ends After Failure

If you fail the Combine, you lose access to the community and live trading rooms unless you re-subscribe. Some traders find value in the community so much that they maintain subscriptions even after failing.

6. Account Dormancy

If you don't trade for 30–60 days, Topstep may close your evaluation account or restrict your access. Restarting requires a new subscription.

7. Payout Delays During Year-End

November–December often see slower payouts due to accounting and compliance reviews. Plan accordingly if you expect holiday withdrawals.

8. Scaling Is Discretionary

While Topstep publishes scaling criteria (consistent profitability, risk adherence), the decision to scale is ultimately discretionary. Some traders report waiting 6+ months for account size increases despite meeting criteria.

Verdict and Use Cases

Topstep is best for:

• Futures traders exclusively (ES, NQ, CL, etc.)
• Traders who value risk management education and mentorship
• Traders seeking a well-established, transparent firm with 12+ years of history
• Manual traders only (no bots or automation)
• Disciplined traders who can work within 2% daily and 5% max drawdown rules

Topstep is NOT for:

• Forex or stock traders
• Algo and bot developers
• Traders who need higher drawdown allowances
• Traders seeking lower evaluation costs (one-time fee models are cheaper)
• Traders who scalp or trade high-frequency strategies

For more detailed comparisons and user reviews, visit our prop firm comparison tool or read the full Topstep review.