Last Updated on July 26, 2024
Traders can have many difficulties when they decide to start trading with a live account. Among these are the low initial capital and the high risk involved. This can lead to a great deal of insecurity. Funded trading programs combine the best of both worlds. They offer you the opportunity to trade and make money without putting your capital at risk. This guide will cover everything you need to know to understand the concept of funded trading accounts. From what is a funded trading program to how to pass and get a funded trading account.
Last but not least, we will go through Earn2Trade’s funded trader programs. It’s the best way to qualify for joining a proprietary trading program enjoyed by thousands of traders worldwide.
What is a Funded Trading Account?
A funded trading account is a proprietary trading account that allows a qualified individual to trade on behalf of a company.
Funded trading accounts exist because they provide individuals with flexibility and ease their way into the trading world. They bring a plethora of advantages.
First, they grant access to a real trading account on behalf of the company and allow individuals to use the corporate license and trade in compliance with the regulatory requirements. That way, they can cut the hassle of dealing with paperwork, ensuring the minimum required funds, getting the appropriate trading licenses and certifications, and more.
Next, trading accounts help you start small. By qualifying for a funded trading program, individuals can trade with a portfolio that significantly exceeds the capital they normally have at their disposal. This means if a trader is good enough, it doesn’t matter if they lack the needed capital.
The benefit for the trading company, on the other hand, is that it sources the best traders through a specific program and then takes a subscription fee and/or a share of their profits.
In a nutshell, funded trading accounts benefit both parties: the company, funding the account, and the individual who trades with it.
There are different types of funded trading accounts based on size and traded instruments. Depending on the firm, these can range from stocks, futures, FX, options, etc.
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What does a Funded Trader Do?
In general, a prospective funded trader has to enroll in an evaluation program or a training course and pass a final exam that reflects their skills and competencies. If the trader fits the requirements, they receive an offer to open a proprietary-funded trading account with the company.
Next, they get access to an account of a particular size. The trader is free to trade with the funds in the account at their discretion. However, every company will have some rules, and the trader will need to comply with them to keep things going. For example, at some companies, these rules might require a specific profit target. Other possible rules include maximum drawdown rates, daily loss limits, and maximum position size, to name a few.
The accounts you get for passing Earn2Trade’s Trader Career Path® and The Gauntlet Mini™ programs, for example, do not require you to meet any profit targets after getting funded. However, they do still set profit goals for the tests themselves, ranging from 6 to 7%, depending on the account.
How to Get a Funded Trading Account
There are a variety of trading programs that, upon completion, grant you a funded trading account. However, not all are created equally fair to you. That is why, before making a choice, you should consider several things.
First of all, you should take care to check what profit split they offer. As well as whether they charge any additional fees and do they give you any special tax status. For instance, some companies may offer you competitive rates for their funded trading accounts. On the other hand, they may also charge you for trading platform licenses, educational courses, data fees, and so on. When all these add up, you will have a pile of fees to cover.
In addition, try to find a company that has a well-developed educational program. It is in your best interest to go through extensive if you have that option. That way, you will be well-equipped and prepared to navigate the markets.
Joining Earn2Trade’s Program
Earn2Trade offers you two funding programs: the Trader Career Path® and The Gauntlet Mini™. We’ll explore the differences between them later. For now, let’s outline the steps to take your first move toward securing a funded trading account by signing up for a funding program:
Step 1: Choose your program and account size
Visit the Trader Career Path® or The Gauntlet Mini™ page to explore your options. For instance, with The Gauntlet Mini™, you have the flexibility to start your examination with virtual capital ranging from $50,000 to $200,000.
After selecting the account type that best suits your needs, simply click the “Start Now” button, as indicated below.
Discount Codes
Look out for our constant promotions to grab one of our programs at a significantly reduced price.
Step 2: Sign up and check out
Next, you have to create your account and complete the purchase. The process is straightforward and takes no more than a few minutes.
Define your login information, read and agree to the Terms & Conditions by ticking the box, enter the billing details for your order, and select your preferred payment method.
And voila! You are ready to rock. Now you just need to pass the test.
How to Pass a Funded Trading Program
Okay, enrolling in a funded trading program was quite easy. But how to pass it? There is one clear answer to this question, and it is: dedicate yourself fully to training.
Like anything else, the key to passing a funded trading program is to put as much effort into preparation as possible. Success is a reflection of your dedication during the training course.
Let’s get more specific. First of all, make sure to go through all the educational content featured in the program. In the case of Earn2Trade’s educational course, this means over 60 explanatory videos (six to ten minutes each) that cover everything from market fundamentals and analysis (technical and fundamental) to advanced trading concepts. Do your best in the quizzes after each video and treat them as a mini-test for the final exam.
Next, make sure to dip your toes into the real trading world via a trading simulator. This is the natural and necessary step in the process of putting the theory into practice. You will apply the knowledge and know-how you gained through the educational course by placing and managing your own trades.
Last but not least, follow the rules to show that you are a disciplined trader who can be successful. This is important because, in the end, you will be trading someone else’s funds, and no company will let you get carried away. That is why you should make a trading plan.
A list of rules to adhere to if you want to pass a funded trading program
A trading plan will include a set of rules established by the provider of the funded trading program. Some companies, for example, set and seek adherence to stringent requirements, which basically limits the freedom of the trader.
In the case of Earn2Trade’s programs, the rules set by our proprietary trading partner, Helios Trading Partners, allow each trader to be flexible and play to their strengths. For the Trader Career Path® and The Gauntlet Mini™, they are the following:
- Only trade during approved times.
- Follow the progression ladder.
- Do not reach or dip below the daily loss.
- Do not reach or dip below the minimum account balance (EOD Drawdown).
To pass, you also need to meet three requirements:
- Reach a specific profit target depending on your account size.
- Trade for a minimum of 10 days.
- Make sure no trading day accounts for more than 30% of your total PnL.
As you can see, these rules are just a framework you should operate within. They are designed to keep your consistency in place and prove that you can be successful with real money. The way they are formulated doesn’t limit how you trade or prevent you from applying your favorite strategies.
However, it is essential to not break any of them. Otherwise, your account might be terminated. Once you deviate from the rules and your account gets terminated, you have to restart the program.
To learn more about the rules, please visit the dedicated page in our Help Center.
Earn2Trade’s Funded Trader Programs
Earn2Trade offers two different funded trader programs tailored to the needs of different market participants.
The most popular choice is the Trader Career Path®. It is a funding program with a scaling plan that allows you to gradually increase your funding offer upon successful completion of the evaluation. The program offers three scaling plans:
- TCP25 – virtual starting capital of $25,000, with a max live account value of $200,000.
- TCP50 – virtual starting capital of $50,000, with a max live account value of $400,000.
- TCP100 – virtual starting capital of $100,000, with a max live account value of $400,000.
To reach the top-tier account, you must progress through a series of smaller live accounts by hitting your profit targets and withdrawing your share of profits at each step.
The Gauntlet Mini™, on the other hand, lets you start directly with the account size of your choice. Whether you aim for a $50,000, $100,000, $150,000, or $200,000 funded account, you can apply directly for the plan that suits you best. Upon successful completion, you will receive a funding offer equal to the chosen size of the evaluation account.
Both programs have their advantages and are suitable for traders with different needs. While the Trader Career Path® is the best choice for those who need a tangible sense of progression on their way to the largest attainable account, The Gauntlet Mini™ offers traders the shortest path to their ultimate goal.
Advantages of Becoming a Funded Trader
The list of advantages of becoming a funded trader is lengthy. Let’s focus on the most notable ones and help you realize why it is worth it:
Risk-free trading
If you become a funded trader, you don’t have to risk your own money. You are trading on behalf of the company and operating with its capital, so you don’t have to worry about yours.
Start with no money
Depending on the company, you may need significant starting capital to become a professional trader. However, when you are a funded trader, you get access to that capital instead and are free to trade it at your discretion.
Save yourself the licensing part
Becoming a professional trader on your own is a tough process. Depending on local regulations, you may have to get yourself a license, pass certification programs, comply with an extensive set of rules, etc. You’ll also often need a high amount of minimum capital to start trading and more. When you become a part of a trading company, you don’t have to deal with all this. You just trade!
Trade from wherever you like
Unlike working as a full-time trader within a particular company’s offices, funded trading programs grant you the freedom to trade from wherever you like, be it your home or on the beach.
There are many other advantages of being a funded trader. However, if we should summarize why so many people switch their focus to such programs, we should say that they allow you to trade someone else’s money but retain the major part of the profits. No risk, great returns!
How do Funded Traders Make Money?
Funded traders make money by making profitable trades with their dedicated accounts. Let’s say that a series of winning trades makes you a profit of $1,000, a part of which you keep for yourself.
The key here is how much exactly of this hardly-earned profit you get for yourself. This depends on the company you’re with. Some will keep up to 50% of your profits, which basically cuts them in half.
That is why it is crucial to find a proprietary trading firm that will leave the major part of the profit for you, the trader who earned it. With Earn2Trade and Helios Trading Partners, for example, you can retain 80% of the profits. This means just 20% of what you have earned (or $200 based on the example above) will go for the company providing you the account and capital you trade with.
What can you trade when you become a funded trader?
Once you become a funded trader, the assets you can trade depend on the prop trading firm and the account type. Most funded trading accounts allow you to trade stocks, FX, futures, and options.
However, you should also bear in mind that you may have restrictions on the instruments you are allowed to trade. For example, some service companies limit you to trading only US-listed stocks that trade on leading exchanges like the NYSE, NASDAQ, AMEX, etc.
Risks Associated with Funded Trading Accounts
To be honest, there are no major risks associated with funded trading accounts. Considering the abundance of advantages that funded trading programs bring to the table, it becomes even more evident why they are so popular among beginner traders.
However, if we should single out a potential downside of funded trading programs, we have to highlight the risk of failing to pass the evaluation and losing the money you paid for the enrollment. Even if this is the case, though, the money is basically not “lost.” Consider it the cost of learning. Such programs give you access to valuable content and industry know-how that you can capitalize on and use to streamline your trading career.
However, even if you fail to pass the program the first time, you can always focus on analyzing your mistakes, going through the educational content once again, and spending some time on a trading simulator. After you have mastered some trading strategies and start feeling confident in your abilities, you can re-enroll in the funding trading program and pass the exam easily.
Even if you consider the risk of not passing the program the first time a deal-breaker, don’t forget that funded trading programs are the shortest path to a professional trading career. The significant opportunities they open for you are worth the risk of enrolling in a problem.
After all, if you are serious about making it on financial markets, you won’t have a problem completing the program successfully.
What do you need to know before becoming a funded trader?
You should know that the most successful funded traders treat the funds they can use as if they were investing their own money. The fact that you are granted access to external capital to trade with and retain the majority of the profits doesn’t mean you are free to be more aggressive, underestimate the importance of proper risk management, or fail to control your emotions. Trading is the same, no matter whether you do it with your own money or with someone else’s.
Another thing you should bear in mind is to make sure that you do proper research before choosing which funded trading program to enroll in. Go through the terms and conditions, get familiar with the most important characteristics (profit goals, trailing drawdowns, maximum position size, etc.), and, last but not least, the program’s cost. Some offerings may cost you up to $10,000 or more, which is much more than you should be paying.
In the end, you are looking for a cost-efficient way to become a professional trader and build a career out of it. That is why you should make sure to lay the right foundation.
Ready to Kickstart Your Trading Career?
Subscribe now to our Trader Career Path® or The Gauntlet Mini™ and begin your path to professional trading!
Here’s what you get:
- Free NinjaTrader and/or Finamark license
- Trading Simulator (Data Feed Included)
- Free Journalytix™ license
- Access to Our Full Catalog of Educational Material During Your Subscription
- Guaranteed Funding Offer After Successful Completion
F.A.Q
The interest in funded trading programs is growing by the day. That is why it is essential to answer some of the most widely spread questions regarding the best opportunity to kick off your trading career:
The funded trader program targets traders who have some experience but lack the capital to make trading full-time profitable.
Funded trader companies make money by taking a share of the trader’s profits. Their share varies. Some companies may keep up to 50% of your hardly-earned profits. This percentage is as low as 20% in other cases, which puts the trader in a much more favorable position.
This isn’t possible, thanks to things like max drawdowns and daily loss limits. They indicate the amount you can lose before your account is suspended. The limits are usually a percentage of the funded amount. For instance, if the maximum drawdown is 10% and you are funded with $25,000, the maximum loss is capped at $2,500.
