Funded account
Also known as: funded trading account, funded trader account, simulated funded account
Funded account: A funded account is the prop firm account a trader receives after passing a challenge, or directly through instant funding, on which profits are shared under the firm's profit split.
Is a funded prop firm account real money?
It depends on the firm. Some funded accounts trade the firm’s real capital; many are simulated funded accounts, on which trades do not reach a real market and the firm pays the trader a share of the simulated profits from its own income. The firm’s terms state which model it uses: what is a prop firm.
How does a funded account work?
- Buy a challenge: pay the firm’s fee for an evaluation account of a chosen size: prop firm challenge.
- Pass it: reach the profit target without breaking the daily or maximum loss limit, in one or two phases.
- Trade the funded account: the firm gives you a funded account with the same loss limits, usually without a profit target.
- Get paid: request a payout under the firm’s schedule and receive your share of the profit: prop firm payouts.
Some firms sell instant funding, a funded account without a challenge, usually at a higher fee and with tighter limits.
Funded account vs live trading account
| Funded (prop firm) account | Live account at a broker | |
|---|---|---|
| Whose money | The firm’s account, often simulated (no real capital) | Your own |
| What you can lose | The fees paid (challenge, resets, add-ons), in most retail models | Your deposit; more where negative balance protection does not apply (depends on broker and country) |
| Rules | Firm’s loss limits, payout and trading rules | Broker’s margin and stop-out rules |
| Profit | Shared under the profit split | All yours |
Which firms offer funded accounts, and their rules side by side: best prop firms, prop firm vs broker.
Rules on a funded account
Funded accounts usually keep the daily and maximum drawdown limits of the challenge, usually without a profit target, and add payout conditions such as minimum trading days or a consistency rule. Breaking a limit closes the funded account: prop firm challenge.
Worked example
Illustrative only: a trader passes a $50,000 two-step challenge and receives a $50,000 funded account with a 5% daily drawdown and 10% maximum drawdown. After a month the account shows $2,500 of eligible profit; with a 90% profit split the trader is paid $2,250.
Learn more
- What Is a Prop Firm? How Prop Trading Firms Work
What a prop firm is and how prop trading firms work: challenge fees, prop firm evaluations, funded and simulated accounts, profit splits, rules and risks.
- Prop Firm Challenge Explained: One-Step, Two-Step and Instant Funding
How a prop firm challenge works: one-step vs two-step evaluations, instant funding, profit targets, drawdown limits, trading days, fees and refunds.
Related terms
- Profit split
A profit split is the percentage of eligible profits on a funded prop firm account that the firm pays to the trader; the firm keeps the rest.
- Instant funding
Instant funding is a prop firm programme in which a trader pays a fee and receives a funded account straight away, without passing an evaluation.
- Daily drawdown
Daily drawdown, also called the daily loss limit, is the most an account may lose within one trading day under a prop firm's rules; the limit is recalculated at a reset time set by the firm.