Funded account
A funded account is a trading account backed by a prop firm's capital rather than the trader's own, granted after passing an evaluation, and governed by loss limits and rules the trader must keep to in order to retain it.
The defining feature is that the downside sits with the firm and the upside is shared, subject to rules. The trader risks the evaluation fee rather than the account balance — but retains the account only while every rule is met.
Rules commonly include a maximum overall drawdown, a maximum daily loss, and increasingly a consistency requirement. A breach usually terminates the account immediately, regardless of whether the account is profitable overall.
A funded account is not free capital. It is conditional access with a termination clause, and the conditions are where most accounts are lost — often on a single day that looks nothing like the trader's normal behaviour.
Related terms
Maintained by Jared Sinclair, Founder · Syrax Global FZCO · Definitions are educational, not financial advice.
Knowing the vocabulary is the easy part.
Every term here can be learned in an afternoon. Applying them consistently under pressure is the part that decides outcomes — and the part we measure.