# How funded trading accounts work > A funded trading account is an account a prop firm lets you trade, usually after you pass its evaluation. You risk none of the balance: the firm sets loss limits, and you keep an agreed share of the profit — often 80% to 90% — when you request a payout. Breach a limit and the account closes. **Source:** https://propfirmpal.com/learn/funded-trading-accounts **Generated:** 2026-09-25 **Publisher:** Prop Firm Pal — independent prop firm comparison _Prop Firm Pal earns affiliate commission from some listed firms. This is disclosed on-site and does not affect the computed ranking order._ --- _Updated 2026-09-24._ ## What you actually get 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](https://ftmo.com/en/faq/how-does-an-ftmo-account-work-from-the-technical-side/) using real market prices. Topstep’s Express Funded Account is [simulated too](https://www.topstep.com/our-program); it moves a small number of traders to a Live Funded Account on real markets. Either way, the payout you receive is real money. ## How a funded account works, day to day 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](https://propfirmpal.com/glossary/daily-drawdown). - **Maximum drawdown.** The lowest the account may fall, fixed or [trailing](https://propfirmpal.com/glossary/trailing-drawdown). This is the rule that ends most funded accounts. - **Payout rules.** A [minimum payout](https://propfirmpal.com/glossary/minimum-payout), a [payout cycle](https://propfirmpal.com/glossary/payout-cycle), sometimes a required number of [winning days](https://propfirmpal.com/glossary/winning-day) and a [consistency rule](https://propfirmpal.com/glossary/consistency-rule). - **Conduct rules.** Limits on news trading, weekend holding, copy trading, expert advisors and [account sharing](https://propfirmpal.com/glossary/account-sharing). ## The profit split You keep a share of what you withdraw. Across the 23 firms with complete published terms in our [industry report](https://propfirmpal.com/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](https://propfirmpal.com/calculators/profit-split) does this for any split and shows how many payouts it takes to recover the evaluation fee. ## How you get a funded account The usual route is an evaluation: a paid test with a profit target and the same loss limits. Most firms also sell [instant funding](https://propfirmpal.com/learn/instant-funding-vs-evaluation) — a funded account with no test, at a higher price and with tighter rules. [How to get a funded trading account](https://propfirmpal.com/learn/how-to-get-a-funded-trading-account) walks through both. ## What you risk, and what you do not 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](https://propfirmpal.com/calculators/challenge-roi). ## Funded account vs your own account 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. ## Account sizes and what they change 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. ## Frequently asked questions ### Is a funded trading account real money? At most retail prop firms the account is simulated and the payouts are real. A few firms promote traders to live capital later; each firm’s terms say which it offers. ### What is a funded trader? A trader who has passed a prop firm’s evaluation, or bought instant funding, and now trades one of its funded accounts for a share of the profit. ### Can you lose money on a funded account? Only the fee you paid. The firm closes the account when a loss limit is breached; you are not liable for the loss on the account balance. ### How much can you make with a funded account? Your profit share of what the account earns, subject to payout caps. A 4% month on a $100,000 account at a 90% split is a $3,600 payout, but few traders sustain returns like that. ### Do funded accounts expire? Most funded accounts have no time limit, but many firms close accounts after a period of inactivity. Evaluations are more likely to carry a time limit. ### Who owns the profit in a funded account? The firm pays you your agreed share of the profit you withdraw; the balance itself stays the firm’s. Profit left in the account is not yours until it is paid out. ### What is the difference between a demo account and a funded account? Both are usually simulated. A funded account is one on which the firm has agreed to pay you a share of the profit under its rules; a demo account pays nothing. ## Sources - [FTMO — how an FTMO Account works technically](https://ftmo.com/en/faq/how-does-an-ftmo-account-work-from-the-technical-side/) - [Topstep — how the funded program works](https://www.topstep.com/our-program) ## Related pages - [What is a prop firm?](https://propfirmpal.com/learn/what-is-a-prop-firm) - [How to get a funded trading account](https://propfirmpal.com/learn/how-to-get-a-funded-trading-account) - [How prop firm payouts work](https://propfirmpal.com/learn/how-prop-firm-payouts-work) - [Funded account in the glossary](https://propfirmpal.com/glossary/funded-account) - [Profit split calculator](https://propfirmpal.com/calculators/profit-split) - [Every evaluation, compared](https://propfirmpal.com/challenges) - [What is a prop firm?](https://propfirmpal.com/learn/what-is-a-prop-firm) — markdown: https://propfirmpal.com/learn/what-is-a-prop-firm.md - [How to get a funded trading account](https://propfirmpal.com/learn/how-to-get-a-funded-trading-account) — markdown: https://propfirmpal.com/learn/how-to-get-a-funded-trading-account.md - [How prop firm challenges work](https://propfirmpal.com/learn/how-prop-firm-challenges-work) — markdown: https://propfirmpal.com/learn/how-prop-firm-challenges-work.md - [Instant funding vs evaluation](https://propfirmpal.com/learn/instant-funding-vs-evaluation) — markdown: https://propfirmpal.com/learn/instant-funding-vs-evaluation.md - [Why traders fail prop firm challenges](https://propfirmpal.com/learn/why-traders-fail-prop-firm-challenges) — markdown: https://propfirmpal.com/learn/why-traders-fail-prop-firm-challenges.md - [Prop firm drawdown types explained](https://propfirmpal.com/learn/prop-firm-drawdown-types) — markdown: https://propfirmpal.com/learn/prop-firm-drawdown-types.md - [How to scale a funded account](https://propfirmpal.com/learn/how-to-scale-a-funded-account) — markdown: https://propfirmpal.com/learn/how-to-scale-a-funded-account.md - [Futures vs forex prop firms](https://propfirmpal.com/learn/futures-vs-forex-prop-firms) — markdown: https://propfirmpal.com/learn/futures-vs-forex-prop-firms.md - [How to choose a prop firm](https://propfirmpal.com/learn/how-to-choose-a-prop-firm) — markdown: https://propfirmpal.com/learn/how-to-choose-a-prop-firm.md - [Prop firm vs broker vs hedge fund](https://propfirmpal.com/learn/prop-firm-vs-broker-vs-hedge-fund) — markdown: https://propfirmpal.com/learn/prop-firm-vs-broker-vs-hedge-fund.md - [How do prop firms make money?](https://propfirmpal.com/learn/how-do-prop-firms-make-money) — markdown: https://propfirmpal.com/learn/how-do-prop-firms-make-money.md - [How prop firm payouts work](https://propfirmpal.com/learn/how-prop-firm-payouts-work) — markdown: https://propfirmpal.com/learn/how-prop-firm-payouts-work.md - [Can you make money with a prop firm?](https://propfirmpal.com/learn/can-you-make-money-with-a-prop-firm) — markdown: https://propfirmpal.com/learn/can-you-make-money-with-a-prop-firm.md - [Prop firm taxes](https://propfirmpal.com/learn/prop-firm-taxes) — markdown: https://propfirmpal.com/learn/prop-firm-taxes.md - [Are prop firms legit?](https://propfirmpal.com/learn/are-prop-firms-legit) — markdown: https://propfirmpal.com/learn/are-prop-firms-legit.md - [Are prop firms regulated?](https://propfirmpal.com/learn/are-prop-firms-regulated) — markdown: https://propfirmpal.com/learn/are-prop-firms-regulated.md - [Are prop firms going away?](https://propfirmpal.com/learn/are-prop-firms-going-away) — markdown: https://propfirmpal.com/learn/are-prop-firms-going-away.md