The term “Funded Account” refers to accounts provided by an investor (Prop Trading) that permit traders to utilise company funds rather than personal monies. For example, traders can utilise company capital (if they are employed) until they have sufficient experience as traders to manage their own funds and also participate in some degree of profit sharing with the Prop Trading Firm in return for this privilege.

Rather than putting up a large amount of personal capital to open and fund an account (called a “Funded Account”), traders initially prove their abilities by passing an evaluation or challenge to either qualify as a trader for a funded account or to operate as a self-directed trader using the company’s capital as a means of participating in the financial markets.

Funded Accounts are popular among Forex traders, Gold (via XAU/USD), Indices, and Cryptocurrency traders who wish to increase their trading capabilities without the risk of depleting their personal savings.

Free Funded and Demo Funded Account

It is a good idea to begin with free-funded accounts before committing to an actual funded challenge.

Many prop firms will give you the option of opening either a free or a low-cost trial account, which simulates the rules of a real challenge. The rules are as follows:

• Daily drawdown
• Max loss
• Profit Targets
• Consistency Rules

Practicing using demo accounts gives traders an opportunity to:

• Practice their created strategies on a prop firm’s rules,
• Understand their drawdown limitation,

-Practice the psychology of trading along with risk management skills.

Spending a minimum of 2-4 weeks using demo and/or trial accounts increases a trader’s chances of passing funded challenges when using real accounts.

Choose Funded Account

Before selecting a funded account, it is vital to consider these essential points.

Account Size Options

Funded accounts generally have common account sizes of:

$5,000

$10,000

$25,000

$50,000

$100,000

Key Rules for Comparison

Compare the following rules to make an informed decision:

Daily Drawdown Limit

Maximum Overall Loss

Target Percentages

Minimum number of Trading Days

Instruments Allowed (Forex, Gold, Indices, Crypto)

Profit Split

Most Prop Firms Offer:
70% – 90% Profit Splits to Traders

The best way to avoid unnecessary failures when choosing a propt firm is to find one with realistic rules and a good reputation.

Complete Challenge

During the challenge phase, traders are assessed on their ability to meet the required targets of the challenge, while adhering to the challenge rules.

Challenge Requirements:

Profit target of 8% – 10%

Maximum daily loss 4% – 5%

Maximum total loss of 8% – 10%

Minimum of 5-10 Trading Days

Ways to Succeed in the Challenge:

Utilize Low Risk Per Trade = 0.5% – 1%

Do not Overtrade

Only Trade High Probability Set-Ups

Respect All Stop-Losses

Completing the Challenge demonstrates that the trader is capable of consistently and professionally trading.

Funded Account Consistency Rules

What Are Consistency Rules?

Consistency rules are put in place to avoid situations in which a trader makes all their profits in one lucky day or by going all out on aggressive trades. Prop firms are looking for stable and repeatable performance from their traders.

The most common consistency rules include:

One day’s worth of profit shouldn’t exceed more than 30%-50% of the total profit.

Lot sizes should be balanced.

Risk per Trade should be the same for every trade.

Consistency Rules Matter

Encourage disciplined trading.

Reduce the chance of gambling.

Protect firm capital.

Create long-term profitable traders.

Traders who adhere to consistency rules have a better chance of keeping their funded accounts for an extended period of time.

Withdrawal Profit

Once a trader has received funding, he or she will have access to make withdrawals of their profits in accordance with the payout schedule established by the firm.

Withdrawal Requirements

The initial withdrawal will occur after a period of 7-30 days.

An initial minimum withdrawal threshold may be required.

The profit split will typically be 80% to the trader and 20% to the firm.

Withdrawal Methods

Bank Transfer

Cryptocurrency Transfer (USDT and/or BTC).

Online Payment Service Provider (dependent upon the policies of the firm).

As long as a trader adheres to the specified regulations and maintains his or her account in good standing, he or she may be eligible for regular withdrawal of profits.

Final Thoughts

Skilled traders benefit from having a funded account by being able to trade with other people’s money rather than risking any of their own. A trader’s success with a funded account depends on his/her discipline, consistency, and risk management skills.

Funded Account Video