Funded Trading: The Pros and Cons

Funded trading can be a great way to make some extra money with your forex trading skills. But is it all it’s cracked up to be? Let’s dive into the pros and cons of funded trading!

Let’s start with the cons of funded trading

You have to take a test before you get access to a funded trading account

Unlike prop firms, funded trading programs don’t ask for credentials, trading history, or a monthly fee. Instead, they want you to take a test to prove that you have what it takes to be a profitable trader for them. Every program will have different variables that you’ll have to follow. Some will want you to reach a certain amount of profit in a certain amount of time, while others just want you to hit that profit whilst taking a trade on at least 3 different days.

You have to split the profit

Even though this is to be expected, it still sucks to have to share your profit with someone else. Every program will have its own profit share split. There is some good news here though! Some programs will give you a bigger cut once you hit a certain profit percentage.

There will be drawdown limits

Unfortunately, you can’t just trade your funded trading account as if it is your own money. With your own account, you can be down as much as you want. Lost 50% of your account? No problem (well, depending on how you look at it…). You can continue trading. With a funded trading account this won’t be possible. Funded trading companies will put limits in place to protect themselves. If all their traders were able to blow 50% of their accounts that’s a lot of money to lose!

Now for the good part: the pros of funded trading

Money, Money, Money

The main benefit of going for a funded trading account is the money. You will get access to an account that has more money in it than you can provide for yourself. More money = more profit.

There is limited risk with funded trading

Not your money, not your risk. Sounds pretty good, doesn’t it? Losing money won’t feel bad, because it’s not your money. Yes, it’ll cut into your profit. Yes, you might lose access to the account if you lose too much… but you still won’t have lost any of your own money.

Community

Not every program will have this, but we have a discord you can join. This means you’ll be able to chat with others who are trying to pass the test or have already done so. Why does this matter? Trading can be lonely sometimes. With this discord, you’ll be able to vent after a bad trade or celebrate the good ones with people who understand what you’re dealing with.

You can join a funded trading program from anywhere in the world

When you are trading your own money you can be limited by rules and regulations. Every country has different rules, but there are limits to what you can do. If you are in the US then you know you can’t sign up with certain brokers due to the regulations. With funded trading, this is no longer a problem. Since you are trading the company’s money, the regulations are different.

No clients

Have you tried trading other people’s money in the past or currently trying to do so? Well, with a funded trading account you don’t have to go through the hassle of trying to find these clients. You also don’t have to take calls or emails every day asking what’s going on in the markets, if their money is safe, how much profit you’ve made… None of that! You can trade without anyone pestering you about anything.

Conclusion

I might be biased here but the pros definitely seem to outweigh the cons. Want to give it a go? Take the challenge now!

255 comments

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