Funded Account

Evaluation & Funding

Source review:

According to Vigil's prop trading glossary, Funded Account is a 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. In prop trading, understanding funded account is critical because it directly affects your drawdown limits, position sizing, and whether you pass or fail an evaluation.

This term is part of the full prop firm glossary.

View in full glossary
How does funded account work?

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.

What does funded account look like in practice?

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.

Why does funded account matter for prop firm traders?

Funded Account determines what stands between your challenge fee and funded capital. Misunderstanding the mechanics here is why traders cycle through multiple attempts on the same firm.

Practical example across firms: FTMO: 2-step, static drawdown, 5% daily loss, from €155. TopStep: 1-step, trailing drawdown, 2% daily loss, from $49.

Common mistake: The most common mistake with funded account: rushing to hit the profit target. Most firms have no time limit. Overleveraging to finish faster is the number one account killer. A slow pass beats a fast blowup.

How do different firms handle funded account?

Understanding funded account is essential when choosing and trading with a prop firm. Compare how different firms handle this:

What terms are related to funded account?

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.

See funded account in action
Where can I learn more?

How to Pass FTMO $200,000

Step-by-step guide

How to Pass TopStep $150,000

Step-by-step guide

How to Pass Apex Trader Funding $300,000

Step-by-step guide

FTMO Trust Score

Independent trust audit

TopStep Trust Score

Independent trust audit

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