Funded Trading Accounts
If you have the skills and knowledge to consistently earn a good profit from day trading, you may find it frustrating if a lack of initial funds limits your potential returns. The best brokers with funded trading accounts solve this problem by allowing proven traders to quickly make use of an investment firm’s capital to trade forex, stocks and other assets, greatly increasing their financial leverage and potential profit.
While traders and brokers with funded trading programs will typically split profits, the trader benefits by being shielded from risk as it is not their own funding at stake.
This guide will give a rundown of the crucial information you need to know to obtain a funded trading account, including a comparison of the top brokers with funded trading programs. We also share our tips on becoming a funded trader, alongside the verification pitfalls to watch out for. Read on to find out how to get funding for forex, stock and crypto trading.
Best Funded Trading Accounts
How Funded Trading Works
The internet has become ubiquitous in our time, bringing the tools to trade out of traditional brokerages and markets into the homes of ordinary investors around the world. As a result, some unaffiliated day traders have developed the skills to consistently make money on stock or forex exchanges.
Some investment firms, trading brokers and prop trading companies have recognized these traders’ potential to bring in profits, so they offer to bankroll them and foot the bill for losses in exchange for a fair share of the money they make. The trader may have to pay a subscription fee or other charge, but the firm provides the capital, sometimes to the tune of 100s or 1000s of dollars. This arrangement is the definition of a funded trading account.
Naturally, since the investor is putting their capital at risk in this arrangement, a trader will need to meet certain eligibility criteria to prove they have what it takes to become funded. The exact steps in this process vary between different programs, but in general, the trader will need to meet a profitability target over a test period.
Once a trader has proven themselves, they will receive an initial amount of capital from the firm, which will set certain terms and conditions to control how trades are conducted and reduce risk. For example, trading firm FTMO requires traders to make trades in 10 days out of 60 in the second step of its verification process, setting a goal of $500 profit on a $10,000 account and allowing a maximum daily loss of $500 and a maximum overall loss of $1000.
How To Choose A Funded Trading Account
If you believe you have what it takes to qualify for a funded trading account, then you will want to dive in and find the best broker for your needs. Here are some of the most important factors to consider when you choose from the long list of brokers with funded trading accounts:
Joining Criteria & Verification
Brokers with funded trading accounts put their money at risk when they bankroll a trader, so they want to make sure they are working with someone who has the skills to make a profit. The way to prove this is to fulfil the broker’s joining or eligibility criteria.
Qualifying for a funded trading account usually involves an evaluation process, which some companies refer to as a challenge. Traders participating in the challenge will need to meet a profit target with a brokerage account over a specified time period, without allowing a drawdown or daily losses below a certain limit. These criteria vary among brokers, but you can expect a target of around 10% of the account value.
Some firms such as Topstep will ask you to complete the challenge on a simulated demo account with no real cash involved, while others will allow you to trade with a funded account from the start.
One company that has quite a different evaluation process is Audacity Capital. This company asks traders to fill out a form with their contact information, and then attend an interview to describe their trading experience. Audacity’s risk management team will assess the interview within 24 hours and notify applicants of the results. Successful applicants can start trading on their funded account after they sign a contract.
When they sign up for the challenge, traders will usually need to pay an evaluation fee to the broker, which may scale to the size of account the trader chooses to manage.
To give an idea of what to expect from this, FTMO’s fee starts at €155 for the 10K account, rising to €1,080 for its largest 200K account. Another funded account broker, London-based City Traders Imperium, charges between £109 and £649, and the Cyprus-based Fidelcrest’s fees range from $349–$1,499.
Charges
Other charges vary among funded trading account providers, so it is important to research these carefully.
The trading broker will usually make its money in two ways: through its share of the profits a funded trading account makes, and through additional charges.
Price structures can vary greatly between different brokers. For example, Topstep allows traders to draw 100% of the first $5,000 profit they make, and 90% of any earnings thereafter. This is likely to be among the most generous deals that can be expected, but you should also factor in the $165 monthly subscription fee Topstep charges.
Other brokers such as Earn2Trade and FTMO offer an 80/20 split in the trader’s favor, while others, including Audacity and City Traders Imperium, split profits equally. You may find some funded trading accounts that are free of subscription charges and other running fees but take a higher cut of earnings instead.
Bear in mind that, as with Topstep, the brokers who offer a more generous share of profits will often also charge a monthly subscription fee. OneUp Trader charges users a $105 monthly fee for its 50/50 profit splitting account, but a hefty $650 per month for the account where traders can take home 80% of profits.
While Topstep, FTMO and some other funded trading accounts offer a free trial, for many others you will need to pay money upfront to enter the challenge before you can try out their system. So, bear this in mind if you want to have the chance to test a company before spending any money on it.
Keep in mind that there may also be hidden or unexpected fees. These could come in the form of commissions, regulatory and transaction fees; penalties for failing to meet the firm’s criteria; chargeback fees if you miss a subscription payment; or currency conversion fees if you pay a subscription in a foreign currency. Some firms also offer educational resources and even 1-on-1 coaching to traders, and this can get expensive if a fee is involved.
You may also face a hefty violation charge of thousands of dollars if you breach the terms of your contract, so it is wise to know all the terms and conditions before you sign up.
Funding Amounts
In the right hands, a higher amount of capital means more buying power and more profits. Different funded trading accounts offer users different amounts of starting capital and scale up to different levels of funding.
Some brokers, such as Audacity, start traders on funded accounts with a lower amount of capital and let them work their way up by meeting targets. In Audacity’s case, there are 6 levels to the funded trading account program, starting at $15,000 and reaching $480,000 at the 6th level. Traders can scale up to double their previous account size each time they meet a 10% profit target.
Other brokers including FTMO and OneStep offer traders the option to choose the amount of funding they want when they sign up. In FTMO’s case, you will choose the funding you wish to receive when you begin your challenge, with 5 levels from $10,000 to $200,000 for a USD account. The firm also offers to upscale consistently profitable traders’ accounts by 25% every 4 months.
City Trader Imperium has a slightly different system whereby new traders are offered an account with starting capital of between $2,500 and $17,500 during the evaluation period. Once they have proven themselves and acquired a full account, they can go on to scale up by meeting 10% targets, with the chance to manage an account worth up to $4,000,000.
Assets & Specialties
Different firms give investors on their funded trading accounts access to different assets. If you’re primarily a forex trader, you will be looking for the best funded trading account for FX; likewise, there will be specific firms that are better for trading stocks, crypto, options and so on.
Some trading firms also provide differentiated accounts and examples for different types of traders. London-based firm Alphachain Traders offers a general “global trader” account, as well as specialized accounts for crypto, forex and algorithmic trading.
Some firms offer a choice between a standard and “aggressive” account, which has higher targets and allows a larger drawdown. City Traders Imperium offers a similar “Day Trading Funded Trader” account for higher-risk traders, which allows a bigger drawdown but requires that all trades are closed at the end of the week.
Leverage & Maximum Loss
The availability of leverage has a huge impact on traders’ strategy as a leveraged position can generate large profits from relatively small price movements. This will be a key factor for many when they choose their funded trading account.
The amount of leverage available will depend, in part, on the type of asset being traded. Futures contracts, for example, tend to be traded with higher leverage, so you would expect a funded trading account that deals with this type of instrument to furnish traders appropriately.
To give an idea of how some funded trading firms deal with leverage, FTMO’s normal account offers leverage ranging from 1:5 for crypto, through to 1:50 for commodities and indices, and 1:100 for forex. Fidelcrest advertises as providing 1:100 leverage for all accounts.
Leverage gives traders the potential to make large gains from relatively small price movements, but conversely, it can send them spiraling into heavy losses. Trading firms usually deal with this possibility by setting limits for the maximum daily and total losses acceptable on a funded trading account.
These limits vary among brokers, but a common limit is 10% maximum loss and 5% daily loss. Check the broker’s terms and conditions to see how they calculate losses. Also note that some firms, such as City Traders Imperium, require that traders close every trade with a stop loss order.
Regional Availability
Naturally, traders will need to be able to access their funded trading account in their country of residence. Many accounts are available in multiple regions across the globe, but traders from India, the UK and Australia will still need to check availability before they start trading forex or any other assets on an account.
Note that since different jurisdictions have different rules on trading crypto and other assets, some features of a funded trading account may be unavailable in your home country.
Markets & Platforms
Different brokers with funded trading accounts will have access to different markets, and this will be a significant factor for most traders. The market-leading Topstep specializes in futures trading from the Chicago Mercantile Exchange, while FTMO traders deal in forex and crypto, and City Traders Imperium provides access to the forex, gold and indices markets.
Likewise, different firms support different trading platforms, with some providing their own proprietary services and others supporting third-party software such as MetaTrader’s MT4 and MT5 platforms. Traders should make sure they are comfortable with the platform available on a funded trading account before signing up.
Pros & Cons Of Funded Trading Accounts
The upside of a funded trading account is obvious – traders who prove themselves will be given access to a large amount of capital without having to risk their own money.
Good investment firms will also provide support to traders to help them sharpen their skills and earn more profit. The top brokers with funded trading accounts treat traders as partners and not customers – it is in their interest for a trader to generate healthy profits, since they will get a share when they do. It is therefore a good sign if a firm has a strict evaluation phase, because this means traders’ abilities are being taken seriously.
Bear in mind that some firms may have a different business model, in which they offer training packages to prepare for a funded trading account. In this case, the firm can make huge amounts of money by charging for this training, and the maximum loss criteria means they face very little downside if a trader does badly once they have completed training.
You should take this into account while researching funded trading accounts. The Try Day Trading firm, for example, sells student packages starting at $495 and reaching $15,395. This program might work for some, but there are far cheaper options out there.
In the end, a funded trading account is really a suitable option for a trader who has already amassed experience and developed skills, so be wary of any programs that offer to teach beginners.
Final Word
For many traders, having the chance to manage an account worth up to $1 million is the dream. With enough hard work and discipline, a funded trading account can make this a reality.
Funded trading accounts are worth it if you have the skills and knowledge to consistently turn a profit on your markets of choice, but as always, you should be cautious before signing up, since some firms charge high fees and may snare you in expensive training courses.
The key to making a good profit is to look for a funded trading account that has a tough evaluation process, but doesn’t charge high fees to participate and offers a fair deal for traders who meet the challenge.
Use our list of the top brokers with funded trading accounts to get started.
FAQs
What Are The Best Funded Trading Accounts You Can Open Online?
The market for funded trading accounts is quite crowded, and there is a variety of options depending on what you wish to trade and where you are located. The top 10 funded trading accounts available in the US in might look quite different to the list of the best funded trading accounts in the UK in 2024.
That said, there are some big names which are popular with a large number of traders. Topstep, Earn2Trade and FTMO are among the main contenders. Check online for reviews of the most popular and trustworthy brokers with funded trading accounts.
How Do You Become A Funded Trader?
Most of the time, you need to complete an evaluation period or “challenge” to become a funded trader. This may involve trading on a live stock market with a small amount of a broker’s money, or trading on a demo account with simulated money. The trader will usually need to meet certain criteria, such as making a 10% profit in 30 days without going below a daily or maximum loss level during that time.
Passing this challenge is a key opportunity for many traders, as it will give them access to a funded brokerage account which may provide access to far more capital than they could acquire themselves, allowing them to make large profits trading forex, the stock market, or their chosen asset.
How Much Do Funded Traders Make?
Traders with good experience and knowledge can greatly increase their capacity to make profit by working with a good broker that offers funded trading accounts. You will have access to a lot more capital and high leverage, while also enjoying support from experienced traders and excellent educational resources.
However, beginners should be careful before signing up with a broker with funded trading accounts. Since it is in the broker’s best interests to find experienced and skillful traders to fund, they are likely to be looking to profit from beginners in other ways, and not from the chance they might turn a profit on financial markets.
How Much Funding Can Traders Get In Funded Trading Accounts?
The size of the funded trading account depends on the broker, but some can go as high as $1 million or more. In addition to this, funded trading accounts often offer access to high leverage, meaning that a funded trader will have greater buying power.
Brokers with funded trading accounts usually allow traders to upscale the size of their account once they meet certain requirements. For example, some brokerages will increase the amount of available capital by a certain amount each time a trader hits a 10% profit target.
What Does It Mean To Be A Funded Trader?
Funded traders are bankrolled by an online brokerage or investing firm. The company provides them with capital to trade in exchange for a share of the profits. Firms have different joining requirements, strategy limitations and other rules. Use our guide to find the right funded trading account for your needs.
What Should I Do If I Have A Problem With My Funded Trading Account?
Most brokers with funded trading accounts offer good support, such as a help center or live chat. Check the broker’s website for details on how to contact them.