For many talented traders, the trading journey hits a wall not because of a lack of skill, but a lack of capital. You might have a trading strategy that works, but with a small account size, the profits hardly cover your internet bill. This is where funded trading account(s) change the game.
By gaining access to a funded account, you can trade with significantly more capital*—leveraging a prop firm’s buying power to potentially replace your full-time income. But how does it work? Is it real money?
Key Takeaways:
- Primary Benefit: Access significantly higher buying power without risking personal savings.
- The Model: Most prop firms utilize simulated accounts with real payouts based on performance.
- Risk Control: Losses are capped at the evaluation fee; you are not liable for trading losses.
- Best For: Skilled traders needing capital scaling rather than strategy development.
Here is everything you need to know about funded trading, from profit splits to risk management.
What are Funded Trading Accounts?
A funded trading account is a large trading account provided by a proprietary trading firm (prop firm) to a trader who has demonstrated consistent trading skills. Instead of risking your own savings (financial risk), you trade with the firm’s capital*.
In exchange, the firm offers high profit splits—often allowing you to keep up to 90% of the gains. It is a unique business model that allows experienced traders to scale their income without the personal liability of opening a massive brokerage account.
How the Funding Program Works
Getting a funded trader account typically involves a few steps designed to ensure you can manage risk effectively.
1. The Evaluation Phase (The Challenge)
Most firms require you to pass a prop firm challenge. This is a demo environment where you must hit a specific profit target without violating strict risk management rules.
- Time Limits: Some firms impose them, fewer are moving to no time limits.
- Account Size: You choose your size, e.g., $100,000.
- Evaluation Fees: A small one-time fee to cover the compliance and setup.
2. The Verification Stage
A second phase to verify you followed the trading and risk management rules. Once passed, you become a funded trader.
3. Trading the Funded Account
You are now an active funded trader for the firm. You can request fast payouts (often bi-weekly) when in profit and are eligible for a scaling plan if you continue to profit along the way.
Real vs. Sim: How Prop Firms Operate
A common misconception is that every funded trader is trading live funds immediately. In reality, acceptable risk management dictates that firms use evaluation models.
Most funded trading accounts start on a simulated feed. Your trades are virtual, but the profits are real. This allows firms to offer high leverage and minimal restrictions (like allowing news trading) without exposing themselves to catastrophic market events.
Comparison: Funded Account vs. Personal Account
| Feature | Personal Trading Account | Funded Trading Account |
|---|---|---|
| Capital Source | Your own savings | Virtual Prop Firm Capital* |
| Risk Liability | 100% of your money | Capped at Evaluation Fee |
| Profit Split | 100% yours | 80% – 90% yours |
| Leverage | Often Low (1:30) | High Leverage (1:100+) |
| Requirements | Capital ($1k – $10k+) | Trading Skills & Consistency |
Why Choose a Funded Account? (The Benefits)
High Profit Splits & Competitive Payouts
The industry standard has shifted. Competitive profit splits are now 80/20 or even 90/10 in the trader’s favor.
Risk Management & Protection
Your maximum drawdown (the max you can lose) is fixed. You can never lose more than the account limit, protecting you from debt. Rules like the daily loss limit help you stay disciplined.
Diverse Asset Classes
Whether you are into forex, stocks, or futures trading, there is a trading program for you. While some firms specifically target futures traders, ThinkCapital offers a multi-asset environment.
Choosing the Best Prop Firm
Not all firms are equal. Some, like Apex Trader Funding, focus heavily on futures. Others focus on Forex. When choosing, look for:
- Regulated Broker Backing: ThinkCapital is unique in having strong broker infrastructure.
- Trading Platform: Do they offer TradingView, Platform 5 or even their own proprietory platform?
- Educational Resources: Do they help you improve?
- Trust: Look for a community of paid traders.
Frequently Asked Questions
Q: Are funded trading accounts worth it?
A: Yes, for traders with a proven strategy. They offer high capital* access for a low entry cost (the evaluation fee). If you can manage risk, the ROI potential significantly outweighs trading a small personal account.
Q: How much does a 100K funded account cost?
A: Prices vary by firm and challenge account type. Typically, a $100,000 evaluation ranges from $400 to $600. Some firms offer discounts or instant funding models (no evaluation) at a higher price point.
Q: Is it possible to make $1000 a day in forex?
A: With a large funded account, yes. On a $100,000 account, a 1% daily gain is $1,000. This is aggressive but achievable for swing traders or day traders with high trading experience.
Q: Which funding account is best?
A: The “best” account depends on your style. Futures traders might prefer specific futures firms, while Forex and CFD traders often prefer ThinkCapital for its broker-backed infrastructure, TradingView integration, tight spreads, and competitive profit splits.
Ready to start your trading journey? Take the ThinkCapital prop firm challenge today.
Disclaimer
This content is provided for educational purposes only and should not be interpreted as financial or investment advice. Trading in forex, stocks, or any other financial markets involves significant risk. You may lose more than your initial investment, and past performance does not guarantee future results.
Always consider your personal financial situation, level of experience, and risk tolerance before trading. If necessary, consult with a licensed financial advisor or qualified professional. Any strategies, tools, or examples mentioned are for illustration only and do not represent a complete guide.
- Note: All references to ‘capital’, ‘funds’, and ‘funded accounts’ on this page refer to virtual capital within a simulated trading environment. Performance fees are paid based on the performance of the simulated account.