What Is a Funded Account and How To Get One?

This guide will cover everything you need to know about getting a funded account. We’ll break down the steps to get started and provide an overview of the top platforms that offer these accounts.

Key Facts Funded Accounts

• Funded accounts come with predefined rules and risk management guidelines traders must adhere to.
• Profits earned from trading with a funded account are split between the trader and the prop trading firm.
• Depending on the agreement, the prop trading firm may share or absorb losses from trading with a funded account.
• Funded accounts provide traders with access to large sums of money to trade, which can increase profitability.
• Traders undergo an evaluation process to qualify for funded accounts, demonstrating their trading skills and ability to manage risk effectively. 

Definition: What is a Funded Account?

A funded account is a trading account established with funds provided by an external source for the purpose of trading securities, forex, or other financial instruments. These accounts are commonly utilized by traders and investors who may lack the necessary capital to engage in significant trading activities independently. 

Funding for these accounts can come from various sources, like proprietary trading firms, investment firms, or private investors. The terms and conditions associated with funded accounts vary depending on the provider but generally involve a profit-sharing structure. This means the trader and the platform providing the funds will share profits.

To acquire a funded account, traders must demonstrate their trading skills and profitability to the funding provider through an application process. This often requires completing a set of trading challenges where applicants must show their trading skills and hit trading targets. Usually, there are multiple stages of challenges before traders receive a funded account.

Pros and Cons of Funded Accounts

Pros	Cons
✅ Can access larger trading capital	❌ Strict rules and performance targets
✅ Potential for increased profitability	❌ Risk of losing funding if performance targets are not met
✅ Allows traders to diversify their portfolio	❌ Evaluation process may be rigorous and time-consuming
✅ Structured environment with risk management	❌ Challenges cost money to enroll, and there are subscription fees.
✅ Provides access to professional trading tools	❌ Dependant on funding provider for capital
✅ No personal capital at risk	❌ Profit-sharing will reduce overall profitability
✅ Access to educational resources	❌ Risk of losing personal funds in the evaluation process
✅ Potential tax advantages	❌ Limited availability of funded accounts for certain markets
✅ Access to proprietary trading strategies	❌ The prop firm may have trading limitations
✅ Possibility of entering advanced programs if you are profitable long-term	❌ Difficult to secure additional funding

How Do Funded Accounts Work?

Funded accounts link individual traders and proprietary trading firms, facilitating a unique trading arrangement within the regulatory framework. Essentially, these accounts do not engage in direct trading; instead, they generate trading signals based on the account holder. 

These signals are then communicated to the proprietary trading firm, which executes trades on behalf of the account through a bridge – a virtual account copied by the prop firm. This bridge ensures compliance with regulations that prohibit direct trading by funded accounts while allowing the prop firm to execute trades seamlessly.

This model enables traders to utilize the resources and capital of prop firms to participate in the markets, while prop firms benefit from the diverse trading strategies of their account holders. It’s a system designed to maximize trading efficiency and regulatory compliance.

How to Get a Funded Account

This part of the guide will cover the practical steps for obtaining a funded trading account. There are two main ways of receiving funding: challenges and instant funding. Let’s dive into the differences and how to approach them.

Challenges

Securing a funded account requires completing a set of trading challenges that individuals must overcome. These challenges will have profit targets that need to be met to proceed in the evaluation process. A prop trading firm will offer multiple challenges based on challenge account balance, fee required to get started, and profit goals.

After completing the initial challenge, the platform may have more phases to complete before receiving a funded account. Here’s a step-by-step guide for starting and completing a trading challenge:

1. Choose a Prop Trading Firm: Compare prop trading firms by looking at the services they offer, challenges, educational material, and other aspects that are important to you. Ensure you are happy with the revenue-sharing structure and the requirements for gaining a funded account.
2. Choose a Trading Challenge: Review the requirements and eligibility criteria for participating in the trading challenge. Prop trading firms offer multiple challenges for different markets, such as CFDs and futures. Each challenge has an account balance and a profit target. Also, higher account balances require a larger initial investment.
3. Complete the Application: Sign up to the prop trading firm and choose the challenge you intend to complete. You can begin trading after paying the challenge fee.
4. Complete the Challenge: Once onboarded, you’ll gain access to an account with a predefined amount of funds based on the challenge. Use your trading strategies, risk management techniques, and technical analysis to hit the profitability targets needed to complete the challenge.
5. Receive a Funded Account: After passing the evaluation test you will have access to a funded account where you’ll split profits with the platform. Now, you can continue trading to earn more profits. If you are constantly successful at meeting targets, the prop trading firm may increase your overall balance.

Instant Funding Accounts

Instant funding accounts offer streamlined access to trading capital without undergoing an extensive evaluation process. These accounts provide traders immediate access to funds, allowing them to start trading instantly. Here’s what you need to know about instant funding accounts:

• Quick Access to Capital: Instant funding accounts enable traders to deposit their own capital and receive additional funds from the trading platform. This eliminates the need to undergo lengthy evaluation processes.
• Flexible Trading Opportunities: With instant funding accounts, traders can start without waiting for approval or meeting specific performance targets. This allows more flexibility and the ability to capitalize on market opportunities as they arise.
• Risk Management: The prop trading firm will still provide risk management rules to prevent unnecessary losses.
• Costs and Fees: The prop trading firm will have an initial fee for receiving capital. The fee varies based on the account size you need. Also, they may require paying for a monthly subscription to use their services.
• Strategies: Some prop trading platforms will prohibit certain strategies such as martingale, grid trading, and high-frequency trading. This is to reduce losses as some trading strategies are riskier to implement than others.

Here’s a quick step-by-step guide on how to get an instant funded account:

1. Research Proprietary Trading Firms: Begin by researching trading firms offering instant funded accounts. Look for firms with a reputable track record, transparent fee structures, and favorable profit sharing.
2. Open an Account: Once you’ve found a suitable proprietary trading firm, visit their website and navigate to the account opening section. Follow the instructions to complete the account opening process, providing the necessary personal information, identification documents, and any other required details. 
3. Request Instant Funding: Deposit funds into your account and choose the account size you need. Based on your deposit, you’ll receive a specified amount, which is shown on the instant funding page.
4. Start Trading: After acquiring the funds, you can start trading and using the provided capital. Access the trading platform the proprietary trading firm offers and execute your trading strategies. 

The Best Funded Accounts

To start trading with a funded account, you’ll need to use a prop trading platform. However, with so many options available, it can be difficult to decide which platform is best. We’ve done the research and found these 3 to be the overall best for beginners and experienced traders. We’ll highlight their top features, supported trading platforms, and available challenges. 

The Trading Pit

We believe in providing our readers with only the best options. Therefore, our top choice for funded trading accounts is The Trading Pit, which offers a range of features and benefits that set it apart in the industry. One of the standout features of The Trading Pit is its in-depth educational content, which aims to help traders enhance their skills.

This section contains blogs, ebooks, webinars, podcasts, videos, infographics, and press releases. It also has trading tools such as LiveSquawk, StereoTrader, an economic calendar, CME heatmap, and market holiday hours.

The trading challenges have clear rules and profit targets, making it easier to decide which plan to pursue. Traders have the option to participate in CFD or future challenges and have up to 4 different plans available.

CFDs:

• VIP:
  • Challenge Account Balance – $100,000
  • Fee to get started – $999
• Executive:
  • Challenge account balance – $50,000
  • Fee to get started – $399
• Standard:
  • Challenge account balance – $20,000
  • Fee to get started – $179
• Lite:
  • Challenge account balance – $10,000
  • Fee to get started – $99

Futures:

• VIP:
  • Challenge account balance – $250,000
  • Fee to get started – $599
• Executive:
  • Challenge account balance – $150,000
  • Fee to get started – $349
• Standard:
  • Challenge account balance – $150,000
  • Fee to get started – $169
• Lite:
  • Challenge account balance – $20,000
  • Fee to get started – $99

Moreover, The Trading Pit offers competitive profit-sharing arrangements, allowing traders to earn a significant percentage of their trading profits. This incentivizes traders to perform well and rewards them for their success. Also, the platform provides access to cutting-edge trading technology and tools, including advanced trading platforms and analytical software, to help traders execute their strategies effectively.

Feature	Details
Challenge	Challenge balance varies from $10,000 to $250,000, with profit requirements changing based on starting capital.
Costs	Challenge fee, monthly fee, market data monthly fee
Assets Available	Forex, futures, CFDs, indices, commodities, stock, and crypto.
Customer Support	Email, phone number, live chat support.
Trading Platforms	ATAS, Rithmic, Quantower, MT4, MT5

FTMO

FTMO stands out as a reputable provider, earning our top recommendation for traders seeking reliable funded accounts. The platform distinguishes itself with its innovative approach to funded trading, offering traders a transparent 3-step evaluation process to qualify for funded accounts. At FTMO, traders have the opportunity to showcase their trading skills and earn access to substantial trading capital without the need for extensive upfront investment.

FTMO is one of the only prop trading firms with an academy designed to teach beginners everything they need to know about this industry. The academy has four parts: the basics, trading analysis, advanced topics, and an FTMO evaluation process. Users can enroll in the academy for free, and the only barrier to entry is signing up.

Trading on FTMO is a great and user-friendly as the prop firm provides everything a client would need. It features advanced trading software such as MetaTrader 4, MetaTrader 5, cTrader, and FX Trader. Also, you can join the premium program to gain benefits like a dedicated customer support agent to assist with any of your needs, a 90% payout ratio, and a maximum capital allocation increased to $600,000.

However, if you’re still unsure about FTMO, you can look at their testimonials page, which showcases the success of other traders with the platform. It features users from around the world and discloses how much profit they have made at FTMO.

Feature	Details
Challenge	Challenge balance varies from $10,000 to $200,000, with profit requirements changing based on the starting capital.
Costs	Only the challenge fee which is reimbursed after successfully passing the challenge and verification.
Assets Available	Forex, CFD, indices, commodities, stock, and crypto.
Customer Support	Email, phone number, live chat support.
Trading Platforms	MT4, MT5, cTrader, FXtrade

Apex

Apex is a leading provider of funded trading accounts, offering traders a blend of competitive features and comprehensive support to maximize their trading success. As one of our top choices for funded trading opportunities, Apex differentiates itself with its advantageous funding program, where users receive 100% of the first $25,000 per account and 90% beyond that.

Traders can choose between the Rithmic or Tradovate plans and control up to $300,000 in trading capital. The platform also provides a great range of trading software, letting users choose the option that best suits their needs. Currently, Apex offers NinjaTrader, R Trader, Rithmic, Tradovate, and TradingView.

The tools section is in-depth and contains valuable data to help you get started. They offer a 30-day free course to learn how to become a profitable trader. Moreover, each category covers a subject, so if you need information on a specific area, Apex will help. Some subjects you will find are trading psychology, mobile trading, automating trades, and trading strategies.

Overall, Apex is a great platform for those looking for advanced trading platforms, tools, and detailed educational content. If you still need convincing to join Apex, take a look at their testimonial page, which discloses multiple success stories.

Feature	Details
Challenge	Challenge balance varies from $25,000 to $100,000, with profit requirements changing based on the starting capital.
Costs	Monthly fee varies depending on the challenge
Assets Available	Forex, CFD, indices, commodities, and stock.
Customer Support	Email, phone number, live chat support.
Trading Platforms	NinjaTrader, R Trader, Rithmic, Tradovate, TradingView

Costs of Funded Accounts

Understanding the costs associated with funded accounts is essential for traders considering this option.

While funded accounts offer the opportunity to trade with larger capital and earn profits, traders should be aware of the various costs involved. Here, we’ll break down the common costs associated with funded accounts:

• Challenge/Evaluation Fees: Many funded account providers require traders to pay challenge fees to undergo the evaluation process. These fees cover the costs of testing the traders’ performance and determining their eligibility for funded accounts.
• Subscription Fee: Some prop firms charge subscription fees to access their trading platforms, educational resources, and support services. These fees are charged monthly, and the amount depends on the plan you choose.
• Profit-Sharing: Profits generated using a funded account will require splitting it with the prop trading firm. The amount varies based on your plan and the agreement made with the platform.
• Withdrawal Fees: Traders may have to pay withdrawal fees when transferring funds from their account. These fees can vary depending on the withdrawal method chosen and the policies of the funded account provider.
• Other Costs: Traders may have to pay a fee to access trading data and tools. Also, some platforms can charge a commission or fee for trades.

How to Withdraw From Funded Accounts

After generating profits, you’ll want to withdraw funds from the funded account. However, the process of withdrawing funds may vary depending on the policies and procedures of the prop trading firm. Here’s a step-by-step guide on how to transfer money from funded accounts:

1. Review Withdrawal Policies: Before initiating a withdrawal, review the policies outlined by the prop trading firm. Usually, you must reach certain profit thresholds to be eligible to withdraw.
2. Log into Your Account: Access your trading account and navigate to the withdrawal section.
3. Select Withdrawal Methods: Choose your preferred withdrawal method from the options provided by the platform. Common withdrawal methods include bank transfers and online banking.
4. Enter Withdrawal Details: Enter the amount of money you want to withdraw and provide any necessary details, such as bank account information or payment wallet addresses.
5. Submit Withdrawal Request: Once you’ve entered the withdrawal details, submit the transfer request and wait for confirmation that the withdrawal has been initiated. Usually, you will receive an email that you signed up with stating a transfer is in progress. Now, wait for the funds to reach your account.

Forex vs. Futures Funded Accounts

Deciding between a forex or futures-funded account can be tricky, especially if you don’t know the differences. Below we will cover the basics of both account types and compare them against each other.

Forex-Funded Accounts

Forex-funded accounts focus on trading currency pairs in the foreign exchange market. These accounts offer traders opportunities to capitalize on fluctuations in exchange rates between different currencies. Forex-funded accounts are known for their high liquidity, allowing traders to enter and exit positions quickly with minimal slippage. 

Futures-Funded Accounts

Futures-funded accounts involve trading futures contracts, which are agreements to buy or sell assets at a predetermined price and date in the future. Futures markets cover a wide range of asset classes, such as commodities, indices, stocks, and other financial instruments. Futures-funded accounts offer traders exposure to diverse markets and asset classes, allowing for greater portfolio diversification and risk management. 

Comparing Forex vs. Futures-Funded Accounts

When comparing forex and futures-funded accounts, several factors come into play, like market dynamics, trading hours, liquidity, and risk management options. Forex-funded accounts offer high liquidity and around-the-clock trading, making them suitable for traders who prefer fast-paced intraday trading strategies

On the other hand, futures-funded accounts provide exposure to diverse asset classes and regulated markets, appealing to traders seeking broader market opportunities and portfolio diversification.

The choice between forex and futures-funded accounts depends on traders’ preferences, trading styles, and risk tolerance. Consider using a free trial that prop trading firms provide and try both trading instruments to help decide which one to trade.

Conclusion

To summarize, funded trading accounts offer an accessible pathway for traders to get capital and pursue their trading goals. Throughout this comprehensive guide, we’ve explored the intricacies of obtaining funded accounts, including the evaluation process, fees, and alternative options such as instant funded accounts. We’ve also reviewed some of the top proprietary trading firms, highlighting their top features and advantages.

To become successful with funded accounts traders must prioritize risk management, continuously learn, and apply technical analysis. Consider taking a course to improve your skills, which The Trading Pit, FTMO, and Apex offer.

Frequently asked questions on Funded Accounts: