How Funded Accounts Differ From Challenges
Once you pass the challenge and verification stage, you receive a funded account. This changes the dynamics of trading significantly. While challenges have strict profit targets, funded accounts focus on sustainability. The firm wants you trading profitably for months/years, not just hitting targets once.
Funded Account Rules: Key Differences
Challenge Rules: Fixed profit target (10%), daily loss limits (5%), total drawdown (10%)
Funded Account Rules: No profit targets, same daily loss limits (sometimes higher), total drawdown (typically 5-10%)
Daily and Total Loss Limits on Funded Accounts
Most firms maintain similar loss limits on funded accounts:
- Daily Loss Limit: Still 5% typically (can trade but stops at this limit)
- Total Drawdown: 5-10% from highest account peak (firm-dependent)
- Monthly Objectives: Some firms require breakeven or small profit some months
- Payouts: Usually monthly based on P&L
Scaling Opportunities on Funded Accounts
The real benefit of funded accounts is scaling:
- Trade $100k consistently for 3-6 months? Offers you $200k account
- Trade $200k profitably for 6 months? Offers you $500k account
- Some firms offer $1M+ accounts after 12+ months consistency
- Scaling increases your monthly profit potential dramatically
Prohibited Activities on Funded Accounts
While funded, watch out for these restrictions:
- News Trading: Most firms prohibit trading 15 minutes before/after major economic news
- Scalping: Many firms restrict holding positions less than 5 minutes
- Hedging: Opening opposite positions simultaneously is usually banned
- Martingale Systems: Doubling down after losses is restricted
- Arbitrage: Taking advantage of price discrepancies is prohibited
Profit Withdrawal Process
How you access your earnings:
- Profits are calculated weekly/monthly
- Your cut (typically 80%) is available for withdrawal
- Withdrawal request usually processed within 5 business days
- Most firms transfer via Wise, wire transfer, or crypto
- Minimum withdrawal amounts vary ($50-500 typically)
Account Termination Conditions
Your account can be closed if:
- You hit total drawdown limit (usually end of month)
- You break prohibited activity rules repeatedly
- You violate the trading agreement terms
- You have zero trading activity for 60+ days
- You request account closure
Real-World Funded Account Example
You're funded with a $50,000 account: - Monthly profit target: Break-even or positive - Daily loss limit: $2,500 (5%) - Total drawdown: $5,000 (10%) - Your trading: Consistent 3-5% monthly returns - After 6 months: You make $7,500-12,500 in profits (your 80%) - Firm offers to scale you to $100,000 - Your 5% monthly return now = $5,000/month profit (80% share)
FAQ
A: Yes, most firms allow it. Many traders trade multiple $50-100k accounts from different firms to diversify income.
A: If you hit daily loss limit, trading stops for that day. If you hit total drawdown limit, your account is typically closed and you'd need to pass another challenge.