Funded Accounts Explained: How to Trade Without Using Your Own Capital
8/19/2025, 10:46:43 AM
Discover how to get a funded account, how it operates, and its benefits and drawbacks. Join FundingPips, a top forex prop firm.
Are you a skilled trader who has great trading strategies but don't want to risk your capital? Or are you simply on the lookout for a great trading opportunity because you don't have substantial funds to begin with?
Guess what? You no longer have to worry, because we have got the best solution for you.
In the last few years, prop firm trading accounts have completely revolutionized trading. Prop firms have started providing skilled traders with master accounts to prove their skill and get rewarded.
This model is specifically designed for seasoned traders who have limited capital but talent to prove and win. You get to trade with the prop firm’s resources at a scale without risking your personal capital. Since this model benefits both and minimizes risk and mental pressure for traders, more and more traders are leaning towards these accounts to pursue their trading journey.
Ready to prove your talent and start your trading journey with a fully funded account? Join FundingPips today, where you get to trade with substantial account size, professional tools, and support.
What Is a Funded Account?
Now you might be wondering what a funded account is and how to get started. A funded account is a master account provided to traders by a prop firm. The traders have to pass an evaluation phase to prove their strategy and risk management abilities to get access to the account.
Traders have to achieve certain profit target while following the drawdown limits. Once passed, traders can immediately start trading and earn rewards. This is a mutually beneficial model. You just have to give a percent of your reward to the firm.
Meanwhile, with a personal trading account, you have all the control. You use your personal funds to trade, and you have the authority to make your calls, but it comes with a huge financial risk and lots of stress. On the other hand, you only need to follow the firm's rules and risk parameters to trade in a prop firm account to make rewards.
How Funded Accounts Work
Once the evaluation or the challenge phase is passed, traders get their funded accounts. The prop trading firm provides the traders with substantial capital to start live trading. The prop firm sets all the rules, like daily drawdown limits, maximum loss limits, position sizing, minimum trading days, and consistency plans to safeguard their funds. The traders have to comply with these trading rules and the risk limits to protect their accounts from blowing up.
Also, in a funded account, reward sharing is the foundation. The firm sets a reward split, anywhere from 50% to 90%, depending on the program and trader’s growth.
How to Qualify for a Funded Account
To qualify for a funded trading account with any prop firm, there are generally two ways. Depending on where you are in your trading journey, you can either use
An evaluation challenge model.
An instant funding model.
Type | Evaluation Challenge Model | Instant Funding Model |
Rules | Traders are required to pass one or more evaluation phases where they trade in a simulated account under monitoring. | Traders have the opportunity to skip the evaluation challenge phase and start trading right away. |
Time limits | Could be anywhere from 30 to 60 days depending on the prop firm. FundingPips imposes no time limits. | Traders can start trading immediately. |
Risk Limits | Daily loss limits and maximum drawdown limits have to be followed. | Daily loss limits and maximum drawdown limits have to be followed. |
Profit Target | Could be 5-10% of the starting balance. | None. |
Trader Level | Beginner and advanced traders. | Seasoned and professional traders. |
Requirements and Skill Tests
Both models are unique in the way they operate. However, there are some common requirements and skill tests traders are required to meet for both models. These include:
Traders need to show consistency in their performance.
Traders must follow the risk management rules, like the daily or overall loss limits.
Both models demand discipline.
Regardless of the trader level, traders have to be capable enough to sustain their account during volatile market conditions.
Be it the evaluation challenge model or instant funding model, FundingPips offers it all. Start your funded trading account journey with FundingPips today to taste success.
Benefits of Trading with a Funded Account
Traders get an edge when they choose to trade with a funded account such as:
Reduced personal financial risk.
Access to larger account size.
Opportunity to scale and earn more.
Potential Drawbacks
Even though trading with a funded account is an enticing opportunity with many benefits, it comes with its own risks and limitations. To get a funded account, the traders have to pay the challenge fees and costs to filter out nonserious people. However, thousands of traders pay the fees, but not all of them manage to become funded traders.
Additionally, the prop trading firms have strict trading rules for both the daily and the maximum drawdown limit. Traders have to comply with these rules to ensure the safety of their accounts. Also, it's a tough task to manage these drawdown limits. Only skilled traders can manage to survive such conditions.
Traders are required to follow the rules set by their prop trading firm. This can be a challenge since traders have limited autonomy over their trading game. The firm gets to make all the important calls, and the traders are required to follow through.
Types of Funded Accounts
Depending on the market you want to trade, there are different account types. Each account type has its own benefits, drawbacks, and rules:
Forex Funded Accounts: In this type, traders get access to trade currency pairs in the global forex market.
Stock and Futures Funded Accounts: In this type, traders can buy or sell stocks using the firm's funds. These include commodities, indices, and futures contracts.
Crypto-Funded Accounts: In this type, traders get to trade cryptocurrencies. These include Bitcoin and Ethereum, etc.
Reward-Sharing Models Explained
The most important thing that runs a funded account is the rewards. The reward-sharing models decide the reward split between you and your prop firm. In most of the prop trading firms, a trader keeps a major chunk of the earned rewards. The remaining reward goes to the prop firm. The reward split could be anywhere from 70/30 to 90/10. It all depends on your firm and your trading performance. With FundingPips, you can earn up to 100% reward split, depending on your scaling level.
Also, the reward depends on certain parameters. The rewards can be monthly and biweekly as well. Additionally, if you manage to bring reward consistently, the prop firms can choose to reward you. Over some time, they start increasing the size of your account. This scaling plan helps traders grow their accounts without much hassle.
Who Should Consider a Funded Account?
To get a funded account, you don't have to be on a certain level to start your journey. Even if you are a beginner, you can get a funded account through the evaluation model. The best part is that the model will prepare you for real-world trading. You just have to stay consistent and disciplined.
As far as the experienced traders are concerned, depending on their preferences, they can also get a funded account through either of the models. Again, it demands consistency, discipline, and profitability.
To succeed in your funded account trading journey, make sure you follow the prop firm’s risks limits and rules. Track your performance. Identify mistakes and learn from them. Instead of overleveraging or emotional trading during volatile times, stay calm and steady, keeping your long-term growth in mind.
Conclusion
Many traders want to trade with a funded account, but not all of them manage to sustain it over the long run. However, trading with a funded account takes your trading game to the next level. You no longer have to worry about any financial stress or losses. You just play by the rules, and you win. It is necessary for you as a trader that before committing to any funded trading program, you do your due diligence and find out what works best for you and your goals. Remember, to stay in the game and win, you have to play to your strengths.
Ready to trade with a funded account with minimum stress and maximum support? Join FundingPips today and step into the world of excellence.
