Glossary
Funded account
A funded account is the account a trader receives after passing a challenge, on which they earn a share of the profit as rewards.
What it means
At most retail prop firms, the funded account is simulated. The trader's results are tracked as if the trades were live, and the firm pays the trader's share of the profit from its own revenue. Some firms copy trades from consistent funded traders into live markets, or move them to live accounts after a set record.
The funded account keeps the loss rules of the challenge, such as the daily loss limit and maximum drawdown, but usually drops the profit target. In its place come the profit split, the reward cycle and, at some firms, a consistency rule.
Identity checks usually happen before the funded account is issued or before the first reward, because this is the point where the firm starts paying money out.
Worked example
A trader with a $100,000 funded account and an 80% profit split makes $6,000 in one reward cycle. They request a reward and receive $4,800. The firm keeps $1,200.
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