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Is funded trading profitable?

Updated: January 06, 2024
Alamin Morshed
Contributor
Opinions expressed by Traders Union Contributors are their own.
Reviewed by
Dr. BJ Johnson
Editor
Fact-checked by
Mirjan Hipolito
Cryptocurrency and stock expert
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Is funded trading profitable?

Table of Contents

  • What is a funded account?
  • Are funded accounts worth it?
  • How much can I earn as a funded trader?
  • Best funded trading prop firms
  • FAQs
Editorial Note: While we adhere to strict Editorial Integrity, this post may contain references to products from our partners. Here's an explanation for How We Make Money. None of the data and information on this webpage constitutes investment advice according to our Disclaimer.

Funded accounts can be a great way to take your trading to the next level, but they are not right for everyone. To make a funded account worth the investment, you must have a solid trading strategy and be willing to commit to ongoing education.

Editor’s Warning:

Traders’ funding is an unregulated sphere, enabling companies to make exaggerated promises and embellish reality. In fact, people mostly lose money by paying the fee for the Challenge (testing) and not receiving funding. That’s why I recommend skipping this game, and honing your skills with one of the reliable Forex brokers, leaders of our rating.

Rinat Gismatullin
Rinat Gismatullin
Author and business expert
Opinions expressed by Traders Union Contributors are their own.

As a chief expert at Traders Union, my primary concern is the interests of our website’s readers, and how to help them preserve capital and prevent loss.

Therefore, before you read this article, in which we looked into the best proprietary trading firms, I would like to warn you about the specifics of working with prop firms that promise funding for traders.

Our research shows that people mostly lose money with these firms, failing to pass the testing stage (challenges). Those who do get the funding are likely to still lose money upon failing to meet certain conditions of the agreement with many hidden clauses. Often, proprietary trading firms make their money not from their share of profits of successful traders, as their websites claim, but from the fees users pay for testing. The funding in itself is essentially nothing more than leverage for you, which licensed brokerages also offer.

This is why I advise against using prop firms, and working with licensed Forex brokers instead. Once you learn to earn stable profit with a real broker, you won’t need to look for a prop firm, because you will be doing well on your own.

Here are several brokerage companies I can recommend:

1
5.7 /10
Open an account
Your capital is at risk.
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.
STUDY REVIEW
2
5.28 /10
Open an account
Your capital is at risk.
STUDY REVIEW
3
6.68 /10
Open an account
Your capital is at risk.
STUDY REVIEW

Proprietary trading companies hire or train professional traders with a lot of experience and then put their money in the hands of these traders to trade assets. Funded trading accounts offer a wide range of advantages. In this article, we'll discuss the advantages and disadvantages of funded trading accounts. We'll also review some of the most popular funded trading companies offering these accounts, so you can decide if a funded trading account is right for you.

Fund your account with Topstep!
Your capital is at risk.

What is a funded account?

A funded account is a type of trading program that allows traders to access funds from a proprietary firm in order to scale profit. By enrolling in a funded account program, traders can also access specialized education and support to learn the necessary skills to trade and gain access to a high-quality trading platform. The funded account also reduces the risk associated with trading, offering real-time data and a monthly fee for access.

Once traders have proven their trading abilities, they are granted access to the funded account and keep up to 90% of all profits. Payouts can then be requested. Overall, these funded accounts can be highly beneficial for traders who want to experience success in the trading industry.

How to Get Funded for Trading Forex?

👍 Funded accounts pros:

•Access to larger capital pools and immediately available funds.

•Protection from loss in case of an unsuccessful trade since the trader is not investing his own money.

•Freedom to choose how the funds are used and invested.

•Opportunity to gain access to licenses and certifications without having to go through the lengthy process.

•The ability to work from anywhere with an internet connection.

•Professional support and guidance from experienced traders.

•Instant access to available resources and up-to-date market information.

👎 Funded accounts cons:

•Funded traders are required to adhere to certain rules & regulations set by their sponsoring company.

•It can take some time for a funded trader to gain the necessary knowledge and expertise.

•Profits may be lower than expected in the first few years due to high fees imposed by trading companies.

•Capital drawdown restrictions may affect the ability of a funded trader to scale up their trading.

How to Become a Prop Trader?

Are funded accounts worth it?

Funded accounts can be a great way to take your trading to the next level, but they are not right for everyone. To make a funded account worth the investment, you must have a solid trading strategy and be willing to commit to ongoing education. Before taking this step, take the time to evaluate your trading style and goals, and make sure you are confident that you can meet the expectations of the funder.

If done right, a funded account can provide the opportunity to increase your profits significantly. However, any losses are also magnified in this type of trading scenario, so it’s important to be aware of the risks before getting started. Think of it like any other investment decision: consider the potential returns, research the risks, and make the best decision for your individual situation.

Best Forex Funded Accounts

How much can I earn as a funded trader?

As a funded trader, you can expect to make 50-90% of your profits. If your losses exceed 5-10% of the initial account at any point, then the prop firm will cease to work with you. However, if you are willing to put in the hard work and due diligence, then the sky is the limit in terms of your earnings.

With a funded account, you can potentially earn a large amount of money without putting in a large amount of capital upfront. This makes funded trading an attractive option for many traders. With the right approach and dedication, you can make significant money with a funded account.

Best Forex Funded Accounts

Best funded trading prop firms

When it comes to funded trading accounts, the most important question is whether or not they are worth it. Funded trading firms offer traders the opportunity to trade with the capital of the firm and potentially earn profits, but there are some important considerations to make before signing up. We have researched some of the best funded trading prop firms, and below we will provide an overview of three of the best funded trading prop firms.

Best Funded Trader Programs Compared
1
9.4/10
Go to broker
Your capital is at risk.
Minimum deposit:
$1
Review

Topstep is an international proprietary trading company registered in the USA. The company has been providing financial services since 2012 and offers exclusive trading terms for clients from different countries. Topstep provides financing of real trading accounts of its clients if they prove the skill to make trades and manage risks on a simulation account. Traders can trade CME Group futures. Trading on real accounts is carried out through the ECN broker Equiti Capital.

Pros/Cons

•Real trading accounts are financed by a broker, there is no need to invest your funds in trading.

•The company provides a wide range of free training materials, including free group coaching.

•You can contact the support team using several convenient methods.

•The broker offers a referral program for extra income.

•The company doesn’t offer bonuses, automated trading, or other passive income options.

•The support service works only on weekdays during set hours.

Study Review
2
9.2/10
Go to broker
Your capital is at risk.
Minimum deposit:
€155
Review

FTMO is an international proprietary trading company created in the Czech Republic in 2014. The platform brings traders into its fold and after traders successfully pass a two-step testing regime, FTMO transfers 400 thousand dollars to the trader’s account. Transactions are monitored by FTMO to grow the deposit. There is a payment of 80% at the first stage of real trading. The 90% Profit Split is available only to those FTMO Traders that have reached Scaling Plan. The company works in full accordance with European financial legislation and is under the local regulator.

Pros/Cons

•Quite low testing cost is €155.

•Classic platforms such as MT4, MT5, and Ctrader are familiar to many traders. For these platforms, hundreds of indicators, scripts, and advisers have been developed.

•The starting reward is 80%.

•Diversification of tariff plans. Candidates can choose a demo deposit from 10 thousand to 200 thousand US dollars. There are tariff plans that span from standard to aggressive trading.

•Leverage is up to 1:100.

•Strict requirements for the test period. The allowable maximum loss is 10% of the deposit amount. The target profit is 10%, for which 1 month is provided.

•There is no information about how the company is funded.

Study Review
3
9.1/10
Go to broker
Your capital is at risk.
Minimum deposit:
$119
Review

Funded Trading Plus clients trade CFDs on currency pairs, indices, precious metals, energies, and cryptocurrencies. There are 18 programs with one- and two-phase challenges, or without evaluation. These programs also differ in initial fees, profit targets, maximum total drawdown, and other criteria. Traders can receive from $5,000 to $200,000 under management upon successfully passing the challenge or immediately if they choose the program without evaluation. Scaling up to $2,500,000 is available. The profit split is 80%/20% at the start and 90%/10% or even 100%/0% later. Traders work on MetaTrader 4 and MetaTrader 5. Leverage is up to 1:30.

Pros/Cons

•Wide choice of programs with universal parameters and acceptable requirements;

•One-time initial fee, refundable for programs with one- and two-phase challenges. No monthly subscription;

•Simple and understandable conditions, no hidden obligations, and profitable trading split;

•The prop firm partners with Eightcap and ThinkMarkets. It offers spreads from 0 pips and low trading fees;

•A demo account with $100,000 in virtual funds is available for exploring the trading process and instruments;

•24/7 technical support is provided via four communication channels;

•Deposits and withdrawals are made with Visa, Mastercard, bank transfers, and crypto wallets without fees.

•The Master program without evaluation is very expensive — a non-refundable initial fee of $4,500 is required for the balance of $100,000;

•Funded Trading Plus offers only CFDs without real assets or futures;

•The firm’s website contains much information, but some important nuances, like the reset fee, are not provided.

Study Review
Best Forex Prop Firms

FAQ

What is the typical amount of capital offered by prop firms?

The average amount of capital that prop firms offer can vary a lot depending on the firm and what it needs. Most prop firms offer between $25 k and $1 million as initial capital, but some may offer more or less depending on the trader's experience and background.

What kind of trading strategies can I use when funded by a prop firm?

When trading with a funded prop firm, you can use strategies like merger arbitrage, index arbitrage, global macro-trading, and volatility arbitrage to make the most money. These strategies are based on analyzing complex data sets, leveraging sophisticated software, and exploiting market inefficiencies. With the right knowledge and resources, these strategies can help you make informed decisions and maximize your returns.

Are there any long-term risks associated with being a funded trader?

Yes, there are some long-term risks associated with being a funded trader. Most notably, funded traders may be required to pay back their trading capital to the fund in the event that their trading performance does not meet the required threshold. Additionally, funded traders may be subject to certain restrictions regarding their trading strategies or the markets in which they may trade, and any failure to comply with these restrictions could lead to the termination of their funding agreement.

What are the benefits of a funded trader account?

The main benefit of a funded trader account is that it provides traders with access to additional capital, which they can use to increase their trading profits. A funded trader account also typically offers access to research and data, as well as other resources such as advanced trading tools, which can help traders make more informed investment decisions.

Team that worked on the article

Alamin Morshed
Alamin Morshed
Contributor

Alamin Morshed is a contributor at Traders Union. He specializes in writing articles for businesses who want to improve their Google search rankings to compete with their competition.

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Dr. BJ Johnson
Dr. BJ Johnson
Developmental English Editor

Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.

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Mirjan Hipolito
Mirjan Hipolito
Cryptocurrency and stock expert

Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).

Read more