Topstep wants everyone to trade responsibly. While trading strategies and styles may vary wildly, the core principles of responsible trading are universal across the entire trading industry. Below are some of our best tips.
Knowing When to Stop with Profit
One of the biggest challenges for traders is knowing when to call it a day. Often, greed can creep in on good days and lead traders to keep pushing for more, resulting in giving back profits or even turning a winning day into a losing one.
Our Suggestions:
Set a Profit Goal:
Determine a realistic profit target that aligns with your trading goals. Once you hit that number, close your trade and step away. Tools like TopstepX™ make this easy with features like the Personal Daily Profit Target or the ability to lock yourself out after reaching your goal. These features can help you lock in your best days without giving back to the market.
If You Want to Keep Trading, Have a Plan:
If you have a strong read on the market and want to keep trading, set a hard stop to protect your profit. For example, if you’re up $10,000 and feel confident in your trade, consider locking in at least $7,500. That way, even if the trade doesn’t go your way, you’ll still walk away with a solid win for the day.
Successful traders have the discipline to walk away with a slightly smaller profit without letting a winning day turn into a big loss. The key to responsible trading is knowing when to protect your gains and call it a day—and with TopstepX, you have all the tools you need to stay on track!
Knowing When to Stop with Losses
Traders with long-term success know when to call it a day. It’s never easy to admit that a day isn’t going your way, but recognizing when to stop is critical. It’s tempting to think, “The next trade could turn it all around!” But on days when you’re not in sync with the market, that next trade is more likely to add to your losses.
Our Advice:
Have a Plan—and Stick to It
Before you start your trading day, set a clear limit on how much you’re willing to lose—whether that’s a dollar amount or a certain number of trades. Once you hit that limit, flatten your trades and walk away. There’s always another day to trade, but going deeper into the red is tough to recover from.
Beware the “One More Trade” Mindset
That voice telling you, “This trade will turn things around!” is often a trap. More often than not, that one extra trade leads to an even bigger loss—and regret.
Track Your Decisions
If you find yourself trading beyond your original limit, start keeping a journal. Write down how often that “one more trade” works out versus how often it doesn’t. Over time, you’ll see how much extra you might be losing.
Traders who last in this industry aren’t perfect -- they just know how to manage their losses and protect their capital. The key is discipline: set your limits, trust your plan, and know when to step away.
Keeping Position Size in Check
Everyone loves watching a winning trade grow, especially when larger position sizes make the numbers climb even faster. But it’s important to remember that the market can take back your gains just as quickly as it hands them out. Maximum position size can be a powerful tool for certain situations but shouldn’t be used in every trade or market condition.
Our Advice:
Start Small and Build
Even in the Trading Combine, where you can trade at maximum position size from the start, we recommend starting with just 1–2 lots. This allows you to build your account balance gradually while reducing the risk of a big loss. As your balance grows, you’ll create room to weather the inevitable losing trades without jeopardizing your progress.
Give Your Trades Room to Breathe
Many traders think, “If I had just a little more room, that trade would have worked out!” While that might be true, the key is to avoid putting yourself in a position where losses become unmanageable. Starting with smaller lot sizes allows your trades the time and space they need to work out without immediately risking your whole account.
Keeping your position size in check is all about balance. By starting small, building slowly, and using maximum size strategically, you’ll put yourself in a better position to grow your account and stay in the game longer.