Funded Account
Evaluation & FundingA trading account provided by a prop firm after passing the evaluation, where the firm supplies the capital and the trader keeps a percentage of profits. The trader does not risk their own money beyond the challenge fee.
Funded accounts are the goal of every prop firm evaluation. Once funded, traders operate under the same or similar drawdown and loss rules but no longer have a profit target. Instead, they keep 80-100% of profits depending on the firm and their scaling level.
Funded accounts are still technically simulated in most cases -- the firm routes orders through their own risk management system. However, the profits paid to the trader are real. Traders receive payouts on a regular schedule (weekly, bi-weekly, or monthly depending on the firm).
Key differences between funded accounts and evaluation: funded accounts may have stricter news trading restrictions (FTMO restricts 2 minutes before/after major events), consistency rules may still apply, and some firms add withdrawal minimums. The drawdown rules continue to apply -- breach them and you lose the funded account.
After passing FTMO $100K evaluation: you receive a funded account starting at $100,000. Profit split is 80% (upgradeable to 90%). If you make $8,000 in a payout period, you receive $6,400. Max drawdown is still $10,000 (floor at $90,000). First payout includes your EUR 540 challenge fee refund.
Funded Account directly affects whether you pass or fail a prop firm evaluation. Unlike trading your own account where you can recover from mistakes over time, prop firm rules create hard boundaries -- violate them once and you lose your challenge fee and have to start over. Evaluation rules determine the path from paying a challenge fee to receiving funded capital. Getting this wrong means wasted money and time. Many traders cycle through multiple evaluation attempts because they misunderstand these mechanics.
Practical example across firms: FTMO and TopStep handle this differently. FTMO is a 2-step firm with static drawdown and a 5% daily loss limit, starting from €155. TopStep is a 1-step firm with trailing drawdown and a 2% daily loss limit, starting from $49. These structural differences mean your approach to funded account must adapt to whichever firm you choose.
Common mistake: Many traders rush through evaluations trying to hit the profit target as fast as possible. This leads to overleveraging and blowing accounts. The firms with no time limit (most of them) give you the freedom to be patient. Use it. A slow, consistent pass rate beats a fast blowup every time.
Evaluation Phase
A simulated trading period where aspiring funded traders must demonstrate profitability and risk management within defined rules. Passing the evaluation earns access to a funded account.
Payout Split
The percentage of trading profits that a funded trader keeps versus what the prop firm retains. Typical splits range from 50% to 100%, with most firms starting at 80% and offering increases for consistent performance.
Profit Target
The minimum profit a trader must generate to pass an evaluation phase or qualify for a payout. Once hit, the trader advances to the next phase or receives their funded account.
Scaling Plan
A program offered by prop firms that increases your account size and/or profit split as you demonstrate consistent profitability over time. Scaling rewards long-term funded traders with larger capital allocations.
Challenge Fee
The upfront cost paid to a prop firm to attempt an evaluation. This fee grants access to the simulated trading environment and is typically refunded after the trader passes and receives their first funded payout.