How funded trading accounts work

Updated 24 September 2026 by the Prop Firm Pal editorial team.

A funded account has a nominal balance — $50,000, $100,000, $200,000 — and a set of rules. The balance is not yours and you cannot withdraw it. What you can withdraw is your share of the profit above the starting balance, on the firm’s schedule.

At most retail firms the funded account is simulated. FTMO’s terms describe it as a demo account with fictitious capital using real market prices. Topstep’s Express Funded Account is simulated too; it moves a small number of traders to a Live Funded Account on real markets. Either way, the payout you receive is real money.

You trade on the platform the firm provides — MetaTrader 5, cTrader, TradeLocker, NinjaTrader, Tradovate or others — under limits that are checked continuously.

• Daily loss limit. How much the account may lose in one trading day, often measured from the day’s starting balance or equity. See daily drawdown.
• Maximum drawdown. The lowest the account may fall, fixed or trailing. This is the rule that ends most funded accounts.
• Payout rules. A minimum payout, a payout cycle, sometimes a required number of winning days and a consistency rule.
• Conduct rules. Limits on news trading, weekend holding, copy trading, expert advisors and account sharing.

You keep a share of what you withdraw. Across the 23 firms with complete published terms in our industry report (September 2026), the median maximum advertised split is 90%, ranging from 75% to 100%. The top of that range is usually reached through a scaling plan or a paid add-on, not on the first payout.

On a $100,000 account, a 4% gain is $4,000 of profit; at a 90% split your payout is $3,600 before any payout fee. The profit split calculator does this for any split and shows how many payouts it takes to recover the evaluation fee.

The usual route is an evaluation: a paid test with a profit target and the same loss limits. Most firms also sell instant funding — a funded account with no test, at a higher price and with tighter rules. How to get a funded trading account walks through both.

You cannot lose more than you paid. If the account breaches a limit, it closes; the firm absorbs the simulated loss and you lose the fee. You are not liable for a negative balance, and you do not deposit margin.

What you do risk is repeated fees. Each failed attempt costs a new evaluation or a reset, and a funded account lost after one payout may not have earned back what it cost. Model it before you buy with the challenge ROI calculator.

Trading your own $100,000 has no rules beyond margin, and you keep every dollar of profit — but you can lose the $100,000. A funded account caps your loss at the fee in exchange for a profit share and a rulebook. For a trader with a small account and a real edge that trade is often worth it; for a trader without one, the fees add up faster than the payouts.

Firms sell funded accounts in fixed sizes, and the rules are usually set as a percentage of the size — or, at futures firms, as dollar amounts that grow with it. A bigger account multiplies both the payout from a given return and the dollar loss the limits allow, so the risk you take per trade should be sized from the limit, not from the headline balance.

A larger account does not make the rules easier. A 5% maximum drawdown is $2,500 on a $50,000 account and $10,000 on a $200,000 one; what decides whether you survive is how your position size compares with that room. Start at a size where your normal trade risk is a small fraction of the daily limit, and scale once the account has earned a buffer.

FTMO — how an FTMO Account works technically

Topstep — how the funded program works