“Funded trading account” is one of the most searched terms in trading, and one of the vaguest. Depending on the provider it can mean a demo account with a payout promise, a leveraged retail account, or a genuine capital allocation. This guide breaks down how funded accounts work, what to check before you commit, and how an FLC allocation is structured.
What is a funded trading account?
A funded trading account is an account backed by a firm’s capital rather than your own. You take the trading decisions, the firm carries the capital risk, and profits are split according to an agreement. Because the firm is exposed, funded accounts always come with risk rules: loss limits, drawdown ceilings, position caps, and activity requirements.
How you get one
- Qualify. Nearly every provider asks you to prove performance first, through an evaluation or qualification phase with a profit target and a loss limit.
- Get approved. The firm reviews your track record for rule breaches and for behaviour it cannot underwrite, such as single-trade gambles.
- Receive the allocation. You are given a capital size — commonly $10,000 to $100,000 — with its own rule set.
- Get paid on a cycle. Eligible profit is reviewed and paid on a fixed schedule, not whenever you want it.
Seven questions to ask before you sign up
- What does it cost to attempt qualification, and what does a retry cost?
- Is the drawdown static, daily, or trailing — and is it measured on equity or balance?
- What is the profit split, and are there fees deducted before it?
- How often are payouts processed, and what is the minimum threshold?
- Are there minimum activity or minimum position requirements?
- Can the firm change your rules or close your account, and on what grounds?
- Is your performance verifiable to anyone outside the firm?
The last question matters more than most traders realise. If your results only exist inside one provider’s dashboard, they are hard to carry with you. A verifiable record is an asset.
How FLC allocations work
FLC qualification is free. You start with $100,000 in simulated capital, trade against live market prices, and qualify by reaching +10% across 20 active days while staying inside a 5% loss limit and holding at least five positions. There is no challenge fee to enter.
After qualifying you can claim a $10,000, $50,000, or $100,000 FLC allocation with a one-time activation fee, run it under a 5% trailing drawdown, and keep 50% of eligible profits. The allocation keeps running — eligible profit is reviewed and paid every 90 days rather than the capital being reset. If you are eliminated during qualification, a retry is $49, as many times as you need. See funding and the rule book for exact numbers.
Is a funded account right for you?
Funded accounts reward process over prediction. If you already think in position sizing, exposure, and drawdown, the model fits you well. If you are looking for maximum leverage on a single idea, the rules will end the account long before the idea pays off.
Next read: what drawdown really means and prop firm vs hedge fund.
FLC accounts trade simulated capital against live market data. Nothing here is investment advice.