Funded Account

The trading account granted after passing the evaluation — almost always simulated, with real profit splits and real payouts.

Definition

A funded account is the account a trader receives after passing the prop firm's evaluation. Rules carry forward from the evaluation (drawdown limits, consistency rules, lot-size caps), and the trader begins earning a profit split on net gains. The critical detail: a funded account is almost always simulated, not a live market account. The firm's real money is exposed through aggregated flow — some firms route a portion of funded trades to the live market (A-book), but most operate primarily on simulated accounts and pay out from challenge-fee revenue.

Example

A trader passes a two-step $100K evaluation on FTMO. They receive a funded $100K account with an 80% profit split, 10% max drawdown, and weekly on-demand payouts. Over three months they net $15,000 in profit and withdraw $12,000 (80%). The account balance resets to the high-water mark after each payout; the drawdown limit recalibrates accordingly. The funded account is simulated — the $100K is not a real brokerage deposit — but the payouts are real.

Why It Matters

The simulated nature of funded accounts is the source of the biggest structural risk in the prop firm model: if the firm's economics turn negative (more profitable traders than challenge-fee revenue can cover), payouts slow or stop. Several firms have failed this way in 2024-2025. Traders should check whether a firm routes any funded flow to live markets and what their payout-history track record looks like before choosing a firm for serious capital.

Related Terms

Evaluation Challenge
The paid skills test a trader must pass to earn a funded account — typically one, two, or three phases with profit targets and drawdown rules.
Profit Split
The percentage of trading profits a funded trader keeps, with the remainder going to the prop firm.
Prop Firm
A company that provides trading capital to retail traders who pass an evaluation, splitting profits between the trader and the firm.
Max Drawdown
The overall account loss cap — the total amount an account can drop before the firm closes it.
← All termsLast updated 2026-04-21