How to find the best-funded trader program?

Table of Contents

Identifying the best companies

While the financial market presents opportunities and a great shot at making decent earnings and living a comfortable life, quite a lot (or majority) of traders get blocked out because they are undercapitalized.
Not having sufficient capital and the usual risks that come with trading stocks, options, futures or commodities, and other financial assets are arguably the most common challenges traders contend with.
To not let any trader or financial markets enthusiast get left behind in the “business” of trading, there is such a thing called the funded trader program. To understand what a funded trader program is all about, it helps if you first understood who a funded trader is.

Who is a funded trader?

As the name implies, a funded trader is approved and licensed to trade a funded account on behalf of an organization or trading establishment.
Of course, the organization won’t just hand a funded account to anyone who claims to be a trader. They usually have a way of screening and verifying that one is actually knowledgeable about trading.
Also, a funded trader doesn’t trade at his/her, the trading organization usually presents traders with the criteria that must be met while taking trades. And you, the funded trader, are accountable to the trading organization. 

Having understood and grasped who a funded trader is, you should already have an idea of what a funded trading program is.
Not to bore you with technical jargon, a funded trader program refers to arrangements that allow you to trade and make money without investing your capital.
And that brings us to yet another big question.

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What are funded trading accounts?

Funded trading accounts are proprietary trading accounts that allow “qualified” individuals to trade on behalf of an establishment or company.

Funding trading offers a plethora of benefits, and the top among them is flexibility and how they make it incredibly easy for individuals to kick-start their trading journey.

Funded trading accounts give you access to live trading accounts.

As we hinted earlier, a funded trading program allows you to trade real or live accounts on behalf of another company. However, you will be provided with corporate license and trading requirements to abide by.
What funded trading accounts do for you is that they take the stress of getting trading licenses and certifications off your shoulder. They also save you the nightmare of getting buried in paperwork while providing you with the minimum required funds for trading.

Another benefit of funded trading accounts is that it helps you start small. Once you scale through the screening process of a funded trading program, you will be provided with a trading portfolio of any size.
Often, funded traders get real trading accounts with more capital than they can lay their hands on. So, all you need to do as a trader is qualify for a funded trading account and let the company take care of the capital.
You have probably been wondering, what’s in it for the companies?

How do trading companies benefit from funded trader programs?

Of course, the trading company or establishment won’t hand over their money to you or let you trade with their money for free. They are in business to make money as well.
Trading companies benefit from funded trading programs in the sense that they source competent traders and get them to trade for them. 

The catch is that the trader trades on behalf of the company and pays a commission or shares the profit with the trading company. That way, it’s a win-win for both parties — both the company that funds the account and the individual that trades with it. 

You should also bear in mind that there are different types of funded trading accounts and are usually distinguished based on the size and type of the traded instrument.

Depending on what financial assets or instruments the company deals on, you could be trading stocks, options, futures, or FX, among other instruments.

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How to become a funded trader?

Earlier, we touched briefly on what it takes or what you have to do to become a funded trader. Building on that, a prospective funded trader would have to enroll in a funded trader program.
To get into a funded trader program, you would have gone through an evaluation or undertaken a training course of some sort and passed an exam that will reflect your skills and competencies as a trader.
If you meet the trading company’s criteria or requirements, you will be made an offer to open a proprietary funded trading account with the company.

After fulfilling these basic requirements (which vary from one trading company to the other), you will be given access to a trading account whose size will be determined by the company.
While you (the trader) will be free to trade at your discretion, there are rules you have to comply with. Sometimes, these rules include meeting set profit targets, not exceeding a daily loss limit, or exceeding a set position size.

Making the right choice of funded trading account.

Sometimes, traders get overwhelmingly excited that they don’t take time to understand what funded trader program they are signing up for. While getting an offer to trade a funded account can be breathtaking, you need to be careful while taking the offer. 

Sometimes, some trading companies are not exactly who they claim to be, and you could be dealing with a gimmick. So, it’s always best to step on the brakes and take a second to rethink your decisions. 

Some factors you should consider adding to your checklist include:

  • Care to know what the trading company is offering with regards to sharing profits.
  • Check to see if there are additional fees you would have to pay and if the offer comes with special tax status.

In conclusion

It’s not unusual for some trading companies to offer competitive rates on their funded trading accounts and charge ridiculous amounts for licenses, education, and any other fee. 

While you are at it, remember to look out for trading companies with well-developed trading education courses. The more education resources you have at your disposal, the better your chances of navigating the markets.

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