A funded trading account is a simulated trading account with a set balance, such as $10,000 or $100,000, that a proprietary trading (prop) firm lets you trade once you pass its challenge. You pay a fee, trade inside set loss limits, and at the reward stage you receive a share of the simulated gains as rewards.
In short
- A funded trading account is usually simulated. At CMC Funded, every evaluation and reward-stage account is simulated, so a losing trade does not take money out of your bank account.
- You earn the account by passing a challenge: reach a profit target without hitting the daily loss limit or the maximum loss.
- The money you spend is the fee. At CMC Funded it runs from $99 for a $10,000 Classic account to $549 for a $100,000 Direct account.
- At the reward stage you keep a share of the simulated gains as rewards. The CMC Funded reward split is 80%, or 90% with an optional add-on.
What is a funded trading account?
A funded trading account is an account a prop firm gives you to trade after you show you can follow its risk rules. The balance is normally simulated, so no real money changes hands on each trade. What is real is the fee you pay to take the test and the rewards you receive, based on how the account performs.
Anyone asking "what is a funded account?" for the first time can be misled by the name, which suggests a firm has handed you money to invest. In practice the firm sets a balance, checks whether you keep to its rules, and shares the gains the account makes with you. A funded trader is the person; the funded account is the account they trade. If you are new to the model, start with what a prop firm is, and for the business side read how prop firms make money.
Funded account trading is, in effect, a paid test. You prove your discipline on a larger account than you might open yourself, and your downside is limited to what you paid for the challenge.
How does a funded account work?
A funded account works in two stages. First you buy a challenge and trade a simulated account until you reach a profit target, without breaking the loss limits or trading on too few days. Pass, and you move to the reward stage, where you keep trading and receive a share of any gains as rewards.
Almost every challenge is built from four rules:
- The profit target is the gain you need to pass, written as a percentage of the starting balance.
- The daily loss limit is the most the account may lose in one day.
- The maximum loss is a floor the account must never fall below. Some firms fix it; others let it trail upwards as the balance grows.
- The minimum trading days rule stops you passing on one lucky day.
Break the daily limit or the maximum loss and the account ends. Miss the target and you keep trading, as long as the firm sets no time limit. The how it works page shows each stage on CMC Funded.
One-step, two-step and no-evaluation accounts
A two-step challenge splits the test into two phases, usually a larger target followed by a smaller one. A one-step challenge uses a single phase, often with a higher target and tighter loss limits. Some firms also sell accounts with no evaluation at all, often at a higher price and with stricter rules. CMC Funded offers Classic (two-step) and Direct (one-step).
Is a funded account real money?
Usually not. Most funded accounts are simulated: the balance on screen is not a deposit you can spend, and your trades are not sent to a market. At CMC Funded every evaluation and reward-stage account is simulated. The real money is the fee you pay and the rewards you receive, which are based on performance.
On your own account, a $500 loss is $500 gone from your savings. On a simulated funded account, the same $500 loss lowers the balance on screen, and it costs you the account only if it breaks a rule. Your money at risk on any one attempt is the fee. Firms call what you receive "rewards" because it is a share of simulated gains, set by the firm's rules.
How is a funded account different from trading your own money?
With your own account, every loss comes out of your deposit and there are no outside rules. With a funded account, the most you can lose on an attempt is the fee, but you must follow the firm's rules, and breaking one ends the account. A demo account sits in between: free, with no rules and no consequences.
| Your own live account | Demo account | Funded trading account | |
|---|---|---|---|
| Money at risk | Your whole deposit | None | The fee for each attempt |
| Cost to start | The deposit | Free | A fee ($99 to $549 at CMC Funded) |
| Rules | Your own | None | Profit target, daily loss limit, maximum loss |
| After a big losing day | You trade on with what is left | Nothing happens | The account ends if a limit is hit |
| What you can receive | All gains, and all losses | Nothing | A share of gains, as rewards |
To risk $50 per trade at 0.5% on your own money, you would need a $10,000 deposit. On a $10,000 Classic account the same $50 trade sits on a $99 fee. The trade-off is the rules: on your own account a bad day hurts, while on a funded account it can end the attempt.
How this works on CMC Funded
CMC Funded offers two routes to a funded trading account, Classic 2-Step and Direct 1-Step, in sizes of $10,000, $25,000, $50,000 and $100,000. Every account is simulated, runs on the Match-Trader platform and has no time limit. The routes differ in their targets, loss limits and fees.
| Classic 2-Step | Direct 1-Step | |
|---|---|---|
| Profit target | Phase 1: 8%. Phase 2: 5% | 10% |
| Daily loss limit | 5% of each day's starting equity ($500 on $10,000 on the first day) | 4% ($400 on $10,000 on the first day) |
| Maximum loss | 10%, fixed ($9,000 floor on $10,000) | 6%, fixed ($9,400 floor on $10,000) |
| Minimum trading days | 3 per phase | 3 |
| Reward split | 80% (90% with the add-on) | 80% (90% with the add-on) |
| Fee for $10K / $25K / $50K / $100K | $99 / $199 / $299 / $499 | $149 / $249 / $349 / $549 |
The daily loss limit is measured on equity, so open positions count against it. It is 5% (Classic) or 4% (Direct) of your equity at the start of each day, so it moves with your account, and an unused allowance does not carry over. Reaching it ends the account, with no warning stage. The maximum loss is fixed and never moves.
You choose your leverage at purchase, from 1:10 up to 1:500, and the price is the same at every level. Higher leverage magnifies both gains and losses. Simulated trades carry trading costs, as they would on a live account: a commission when a trade opens and when it closes, a price markup on some symbols, and holding costs on positions kept overnight.
You can trade forex, indices, commodities, shares, cryptocurrencies and prediction markets (no futures or options). News trading is allowed, and so is holding positions overnight and over the weekend. Optional extras, such as a higher reward split, are offered at checkout before you pay.
Worked example: a $10,000 Classic account from fee to reward
- You pay the $99 fee and start Phase 1 with a $10,000 simulated balance.
- You set your risk at 0.5% per trade, which is $50. The daily loss limit is $500, so ten full losses in one day would reach it. Open trades count too, so you plan to stop for the day after three losses ($150).
- The Phase 1 target is 8%, or $800, which takes the balance to $10,800. If each winner makes twice the risk ($100), then 14 winners and 12 losers get you there: 14 × $100 − 12 × $50 = $1,400 − $600 = $800, before trading costs. You need at least 3 trading days.
- Phase 2 asks for 5%, which is $500 on a $10,000 account, again over at least 3 trading days. The $500 daily limit and the $9,000 floor still apply.
- At the reward stage, say the account shows a $600 gain. With the standard 80% split your reward is $480 (0.80 × $600). With the 90% add-on it is $540 (0.90 × $600).
If the account reaches the $500 daily limit or falls to $9,000 at any point in the challenge, it ends, and the $99 fee is the whole cost of the failed attempt. Steps 3 and 5 are arithmetic examples of how the rules fit together. They do not forecast how any account will perform.
Are funded trading accounts worth it?
A funded trading account can be worth it if you already trade a written plan with a fixed risk per trade, and you would rather put a fee at stake than a large deposit. It is poor value if your method is untested, because each failed attempt costs the fee when a free demo would teach you the same lesson.
In its favour, you know your downside per attempt before you start, and the loss limits impose the discipline that many traders struggle to keep on their own account.
Against it, fees add up over several attempts, and one bad day can end an account that took weeks to build. You keep a share of the gains, 80% or 90% at CMC Funded. The rules also leave no room for a habit of widening stops or adding to losing trades. If you recognise those habits, fix them on a demo first; the Academy lesson on how a challenge works shows where traders usually trip up.
Common mistakes
Buying the largest account first is an expensive way to learn the rules. The rule percentages are the same at every size, so a $100,000 Classic account is no easier to pass than a $10,000 one. It costs $499 instead of $99, so each failed attempt costs about five times as much.
Sizing for the target instead of the limit breaks accounts quickly. On a $10,000 Classic account the 8% target is $800, which is more than the $500 daily loss limit. Trying to pass in one day usually means trades so large that two or three losses reach the $500 limit. Work out your risk per trade from the daily limit, then let the target take the days it takes.
Open positions count against the daily limit. Because it is measured on equity, three open trades each showing $110 against you use $330 of a $500 allowance before you close anything.
Costs belong in the plan. Commission on opening and closing, markups and overnight holding costs all come off the gain you are building towards the target.
Treating the fee as money to win back is the last trap. Buying attempt after attempt, each with bigger trades, turns a fixed cost into a chase. Decide in advance how many attempts you will pay for.
Questions traders ask
How much does a $50,000 funded account cost?
At CMC Funded, a $50,000 account costs $299 on Classic and $349 on Direct. Compare the rules you get for the fee as well as the price itself. A $50,000 Classic account has a $2,500 daily loss limit on its first day and a $45,000 floor; a $50,000 Direct account has $2,000 and $47,000.
How much is a $100,000 funded account?
A $100,000 account at CMC Funded costs $499 on Classic and $549 on Direct. On Classic the daily loss limit is $5,000 on the first day and the maximum loss floor is $90,000. On Direct they are $4,000 and $94,000. The smallest size, $10,000, costs $99 on Classic and $149 on Direct.
What happens if you lose money on a funded account?
Losses within the limits are part of trading: the simulated balance falls and you carry on. If losses reach the daily loss limit or the maximum loss, the account ends, and at CMC Funded there is no warning stage first. Because the account is simulated, you do not repay the losses; the fee is what you lose.
How long does it take to get a funded account?
There is no time limit at CMC Funded, but each phase needs at least 3 trading days. That makes the shortest possible Classic challenge 6 trading days across its two phases, and the shortest Direct challenge 3 trading days. With no deadline, you can trade at your normal size instead of rushing the target.
Next steps
Before you pay for anything, work through the Academy lesson on daily loss and maximum loss and size a few practice trades with the position size calculator. Every limit in this guide is set out in full on the rules page.
Account sizes and fees for both routes are on the challenges page.