Topstep CEO Michael Patak: The Story Behind the Original Futures Prop Firm

Michael Patak blew up three brokerage accounts and lost $90,000 before he ever built anything.

That's the origin story of Topstep—not a Silicon Valley success narrative where a genius spots a market gap and executes flawlessly, but a trader who got humbled by the markets, rebuilt from scratch, and eventually created a company that would define an entire industry.

Today, Topstep has funded traders in 140+ countries, processed millions in payouts, and spawned dozens of competitors trying to replicate what Patak built on the floor of the Chicago Board of Trade in 2012. Understanding how Topstep started—and why Patak built it the way he did—explains a lot about why the firm operates the way it does today.

Why Topstep matters: Topstep is the firm that started the futures prop trading industry. Founded by CME floor trader Michael Patak, they've been around longer than any competitor. I've evaluated their accounts, tracked their payout history, and compared them against every major alternative in the space.

That said, longevity doesn't mean perfection. Topstep has strengths (proven track record, fast payouts, strong platform support) and weaknesses (trailing drawdown, subscription model costs, no affiliate program for reviewers) that I've documented honestly. For a complete breakdown of their account types, pricing, and what to expect at each stage, read my full Topstep accounts overview. For the absolute latest, check Topstep's website or their Help Center.

The Trading Pit: Where the Name Comes From

Before electronic trading existed, futures markets operated in physical trading pits. Hundreds of traders stood on tiered platforms, shouting orders and using hand signals to execute trades in real time. The physical layout of these pits wasn't random—it was hierarchical. The top step of each pit was reserved for the biggest and most successful traders. From that elevated position, you had the clearest view of the market, the best angle for receiving favorable prices, and the respect of every trader below you.

Early in his career, Michael Patak stood below that step. He was a young trader at the Chicago Mercantile Exchange, learning the business the hard way—by losing money. He'd followed markets during college, developed a genuine passion for trading, and moved to Chicago to pursue it professionally. He became a CME Group member and joined the Dow futures trading pool, eventually becoming one of its largest traders over a decade-long floor career.

The name "Topstep" comes directly from that pit experience. According to the Omaha World-Herald's reporting, the company name was chosen because the best traders in each pit stood on the top step—the position that represented both achievement and the best vantage point for profitable trading. It's a name rooted in physical trading history, which is fitting for a company that emerged from the floor rather than from a tech incubator.

The $90,000 Lesson

The $90,000 in losses across three blown accounts happened while Patak was still in college. Three separate accounts. Three separate failures. Total wipeout each time. For most aspiring traders, that would be the end of the story—an expensive hobby that didn't work out.

For Patak, it was the beginning of a different approach. After the third blowout, he stepped away from live trading entirely and spent six months on a simulated account. Not trading small. Not gradually scaling in. Full stop. Six months of simulated trading where he could make mistakes without financial consequences, develop a structured strategy, test his discipline, and prove to himself that he could be consistently profitable before risking real capital again.

When he returned to live markets, the results were different. He began generating six-figure annual profits. The discipline he'd developed in simulation—the same discipline he'd lacked during those first three accounts—became the foundation of his trading career and, eventually, his company.

This personal experience directly shaped Topstep's entire business model. The Trading Combine is, at its core, the formalized version of what Patak did himself: prove you can trade profitably and manage risk in a simulated environment before being given real capital. He built the company he wished had existed when he was blowing up accounts in college.

From the Pit to the Screen

Patak traded on the CME floor for over a decade, joining in 2003 as an NFA-registered member. He spent eight years in the Dow futures trading pit—physically standing in the pit, reading order flow from hand signals and shouts, developing the market intuition that only comes from direct human interaction with price discovery.

But electronic markets were transforming the industry. The shift from open outcry to screen-based trading was eliminating floor trading jobs and democratizing market access. Suddenly, anyone with a computer and an internet connection could trade the same futures contracts that had previously required physical presence on the exchange floor.

Patak recognized two things about this shift. First, electronic trading would create an enormous influx of retail traders who needed education and structure. Second, the talent identification problem that existed on the trading floor—how do you find skilled traders among the masses?—would become exponentially harder in the digital age.

The idea for Topstep had been percolating since 1997, nearly 15 years before the company formally launched. Patak envisioned a platform that would support traders by providing opportunities and guidance, essentially recreating the mentorship and community dynamics of the physical trading pit in a digital environment. The concept needed the electronic trading revolution to mature before it could become viable as a business.

The NFL Scouting Combine Inspiration

When Patak finally launched TopstepTrader in July 2012 on the floor of the Chicago Board of Trade, he modeled the evaluation process on an unlikely inspiration: the NFL Scouting Combine.

In professional football, the Combine is where college players demonstrate their physical abilities, skills, and mental preparedness to NFL scouts. It's not a game—it's a structured assessment designed to identify which athletes have the raw talent and discipline to succeed at the professional level. Teams invest millions based on Combine performance because the evaluation process, while imperfect, is the best predictor available.

Patak applied the same logic to trading. The Trading Combine would be a structured evaluation where traders demonstrate their profitability, risk management, and discipline. Like the NFL Combine, it would be open to anyone willing to participate—background, education, and connections wouldn't matter. Performance would.

This meritocratic philosophy remains central to Topstep's identity. Patak has consistently stated that he wants new traders to avoid making the same mistakes he did, and he sees the platform as a way to enable talent "regardless of background." Whether you're a college student in Ohio, a government worker in Nigeria, or a retired engineer in Germany—if you can trade profitably and manage risk, Topstep will fund you.

Building the Company

The early years of TopstepTrader were a patience exercise. Patak has said in interviews that his biggest challenge was "having the patience to let it develop." He had more ideas than he could execute simultaneously and constantly battled the urge to force growth rather than letting the business develop organically.

Initially, Topstep operated two divisions: TopstepTrader for futures and TopstepFX for forex. The forex division was eventually discontinued in April 2022 to focus exclusively on futures—the market Patak knew best from his decade on the floor. This narrowing of focus proved strategically sound, as it allowed Topstep to become the definitive leader in futures prop trading rather than a mediocre player across multiple markets.

The company grew through word-of-mouth and community building rather than aggressive marketing. The chat room—now evolved into a 72,000+ member Discord—was a core feature from the beginning. Patak participated personally, answering questions and sharing market analysis. This created an authentic community dynamic that advertising couldn't replicate.

Recognition and Growth

The growth trajectory validated Patak's approach. In 2016, Topstep was named one of the 101 Best and Brightest Companies to Work For, recognition that credited Patak's structured workflow and team culture. That same year, Topstep was a finalist in the Chicago Innovation Awards. The FIA (Futures Industry Association) named the firm an Innovator—significant recognition from the institutional side of the industry.

Patak personally received Ernst & Young Entrepreneur of the Year semi-finalist honors in 2015 and finalist status in 2016 for the Midwest region, competing against established business leaders across Illinois and Wisconsin. In 2017, Inc. Magazine ranked Topstep No. 1,261 on its Inc. 5000 list of fastest-growing privately held companies in America.

These accolades matter because they came from institutions outside the prop trading world. When the FIA recognizes your firm and Ernst & Young nominates your founder, it signals legitimacy that transcends the sometimes-questionable reputation of the broader prop firm industry.

The Rebranding and Modern Evolution

In 2020, TopstepTrader merged its divisions and rebranded simply as "Topstep." The simplified name reflected a more focused company—futures only, community-first, technology-driven. The merger coincided with explosive growth in retail futures trading during the pandemic era, as lockdowns drove millions of new participants into financial markets.

The introduction of TopstepX represented the company's most significant product evolution. Building a proprietary trading platform was a massive undertaking—and a controversial one, given that it meant removing support for beloved third-party platforms. But the strategic logic was sound: controlling the platform allowed Topstep to eliminate commissions, integrate custom tools like The Tilt™, build in risk management controls, and create a unified trader experience.

More recently, Topstep expanded beyond prop trading to launch a retail-focused introducing broker, designed to make personal futures trading more accessible. Clients can fund accounts traditionally or transfer prop earnings directly—creating a pipeline from evaluation to funded trading to personal account management, all under the Topstep ecosystem.

The Philosophy That Persists

Through every evolution—from floor trading to digital evaluations, from two divisions to one, from third-party platforms to TopstepX—Patak's core philosophy has remained consistent: trading success is earned through discipline, consistency, and structure, not talent alone.

This philosophy explains Topstep's rules, which sometimes frustrate traders who want maximum freedom. The Consistency Target exists because Patak learned firsthand that one big win doesn't make you a profitable trader. The EOD trailing drawdown exists because the market will take your money back if you don't protect your downside. The self-imposed risk controls on TopstepX exist because Patak blew three accounts before he learned to manage himself.

Every Topstep rule, in some way, traces back to a lesson Patak learned by losing $90,000 as a college kid who thought he understood the markets.

Where It All Stands Today

Topstep under Patak's leadership has become the standard against which every futures prop firm is measured. When Tradeify advertises zero activation fees, they're implicitly comparing against Topstep. When MFFU promotes no consistency rule, the unspoken comparison is Topstep's 50% target. When Alpha Futures highlights its Daily Loss Guard, the benchmark is Topstep's approach to risk management.

Being the industry's reference point is both an achievement and a challenge. Competitors can study Topstep's model, identify pain points, and build specifically to address them—while Topstep carries the complexity and overhead of a 14-year-old organization that can't reinvent itself as easily as a startup can build from scratch.

But the trust advantage is real and, so far, durable. When traders ask "which prop firm will definitely pay me?"—the answer, consistently, is Topstep. That reputation took 14 years and millions in payouts to build. It started with a guy who lost $90,000 and decided no one else should have to learn the same lessons the same way.

‍