Trading in forex is an investment strategy that often requires a lot of starting capital in order to make significant amounts of money from small moves in the market.
Because of this, it can be difficult to get started in forex as an individual trader, as making enough money to not have it swallowed up immediately by brokerage fees requires either large initial investments or considerable use of leverage.
In both cases, the best and safest way to trade forex is by working with a funded trading account, typically accessed through a proprietary trading firm.
They will provide the capital, trading platform and flexibility to execute effective strategies, with a successful trader keeping the majority of the earnings.
There are a lot of different types of accounts, with a range of application criteria and credit limits.
Getting started is very simple, but passing an evaluation and making consistent returns is something that can catch out an unprepared and uninitiated trader.
With that in mind, here is how you apply for a funded account and, more importantly, how you keep hold of it.
Applying For A Funded Account
The quickest and easiest way to get a funded account is to apply for instant funding through a capable prop firm.
They work in the same way as any other prop firm account; you fill out the application form, choose the capital program, platform and add-ons you want, pay the application fee and have access to an account that mirrors a live retail brokerage account.
Follow the account rules, including setting up risk management protocols, and you can earn as soon as you start trading with the account, with greater rewards and capital amounts available once you reach certain funding levels.
This includes not only access to capital but also access to leverage, something that can be essential for some types of forex strategies.
This is the quickest path to a funded account, but is it necessarily the best option for everyone? One-Step and Two-Step programmes are cheaper to apply for and are designed for traders who want to learn in an environment that ensures they are building up the right skills in the right way.
Beyond this, however, there is a difference between accessing an instant funding account and keeping hold of it. Traders who are impatient and underprepared tend not to stick around, either by breaching one of the account rules or hitting the drawdown limit and triggering an intervention.
Even with an instant funding account, that first stage should be treated as an evaluation, and with that in mind, here are some tips to keep your account and pass evaluation challenges when applying for a funded account.
How Do You Keep Hold Of A Funded Forex Account?
Half the battle is getting an account, and that half can be as simple as paying for instant funding. But keeping hold of it and making money from it is a completely different matter entirely.
Every trader is unique, and the point of prop firms is to take advantage of individual trading skill with the resources of a firm, but there are some tips that will give you a better chance of success.
The first and by far the biggest is to have a trading plan going in. Never think that you can develop your strategy whilst executing it.
That is the equivalent of learning to drive a car during the 24 Hours Of Le Mans; at best you come last, at worst you end up in a hideous accident.
Any prop firm will have a trial platform that you can use to test your skills, get used to different strategies and learn more about trading without money on the line.
As well as this, choose a market and build your skills, rather than trying to hop between different sectors with fundamentally different rules.
Even some of the absolute best traders in history have fallen flat by switching to an unfamiliar market. Stanley Druckenmiller, the architect of the most audacious and successful short play in the history of forex in 1992, lost billions in technology stocks in 2000.
As well as this, remember that the goal is consistent long-term profits. Most trading firms know that anyone can hit the jackpot once, and will often penalise traders for making reckless, risky plays even if they end up being successful.
Patience, discipline and consistency are what a prop firm is looking for, and developing those skills and the psychology that goes with them are the keys to success.