The funded trader in trading is an investor who receives a share of profits from a proprietary trading firm. Such funds often keep 50% of profits while leaving half for the provider. In order to remain profitable, the funded trader must look for a proprietary trading firm that gives a large portion of profits to the trader. Some examples of such firms are Earn2Trade and Helios Trading Partners. The account and capital providers get 20%.
Profit Splits
If you are the funded trader, you may be wondering about profit splits in trading. Some trading platforms give their funders a split of between 50 percent and 80 percent of the profits you make. Others have higher profit percentages. It all depends on your country’s tax laws and your preferences. In the FundedNext model, traders are required to prove their trading ability in two phases. The first phase requires them to reach a profit target of between 10% and 25%. The second phase requires traders to achieve a profit target of at least 20%, after which their account is closed. If they have met that target, the FundedNext model will split their profits at a 90/10 ratio.
Generally, funded traders receive an initial capital of $50,000, which can be increased by accessing more capital from the firm. The profits may compound over time, and larger funded accounts give traders more buying power. Some of the big prop trading firms provide monthly incomes for their traders, which can help them focus on trading and meet their basic needs. However, the profit agreement with the funder may be affected by the amount of office work required.
Limits On Trades
There are limits on trades for the funded trader in every trading account. Beginners in the beginner program are allowed to open up to two contracts a day, while advanced traders can open up to four contracts a day. A trader can also lose more than 1% of their account in one day, but there are limits. Beginners should be aware of these restrictions before they begin trading live.
There is a two-stage evaluation process before the funded trader is allowed to start trading live. If he or she is successful in earning good profits, their account size is increased by 30%. In order to qualify for this, the trader needs to make a profit of at least ten percent for two consecutive months. Once this has been achieved, the trader is eligible to increase their account size by another 30% up to $300,000 according to the FTMO review.
It Requires 10 Trading Days
FTMO is a trading platform that has a 10 day minimum trading requirement to get started. This means that traders must hold their account for at least 10 trading days before being able to participate in the challenge. These days do not have to be consecutive. Those who have reached this goal are then given an offer to become a funded trader. After a trading day, you will be given an opportunity to verify your strategy. This phase is free and allows you double the time to reach your profit target. You can also complete the verification phase early if you want. You can choose to trade on 60 calendar days, but the minimum trading day is still 10 days. Different trading accounts will require different rules, including the maximum daily loss and profit target percentage.
A good trading program should have realistic trading requirements. For example, a % profit split on a highly funded account may sound good, but it is unlikely to work out. Prop firms should also make trading requirements realistic. FTMO can be a great choice for funding, but it does require a two-step evaluation.
