Funded Accounts
Funded Accounts Explained
A plain-language guide to what funded accounts are, how the companies behind them make money, and what to check before you pay for a challenge.
1. What is a funded account?
A funded account lets you trade a firm's capital instead of your own, after passing an evaluation (often called a "challenge" or "combine"). If you trade within the firm's rules and hit a profit target, you can get funded and split future profits with the firm.
2. How the business model works
Most firms earn revenue from evaluation fees, resets and add-ons — not only from traders who get funded and stay profitable. That doesn't make the model bad, but it means the rules (Daily Loss Limit (DLL)The maximum amount you're allowed to lose in one trading day before you fail or violate the account rules., Trailing DrawdownA drawdown limit that moves up as your account makes new profit highs, but never moves back down — it can lock in a failure even after you were profitable., Consistency RuleA rule requiring your profits to be reasonably spread across multiple trading days, rather than coming from one single best day, before you can get paid.) matter more than the marketing.
3. Why account size doesn't tell the whole story
A "$100K funded account" is not $100,000 of risk-free buying power. Daily loss limits, drawdown rules and position-size caps usually mean your real risk budget is a small fraction of the headline number. Compare rules, not just size.
4. Rules you must check
- Daily Loss Limit
- Max Drawdown
- Trailing Drawdown
- Payout Rules
- Consistency Rule
- News & weekend holding rules
- Reset & activation fees
- Scaling plan rules
Who it fits
Traders with a tested strategy and the discipline to follow strict daily and overall loss limits without revenge trading.
Who should be careful
Beginners still finding a strategy, or traders who overtrade and revenge trade after a loss — strict rules amplify those habits into fast failures.
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