How To Get Funded For Forex Trading

Forex trading is now very straightforward to access for individuals with a reasonable level of skill and knowledge. Thanks to sophisticated online trading platforms, it’s no longer the preserve of city bankers, but open to anyone who is willing to put in the time and effort to trade. 

However, many potential traders may be wary of risking their own money, or do not have sufficient capital to make the rewards seem worthwhile. If this sounds like you, then here’s all the information you need to know about accessing instant forex funding. This will allow you to make use of your skills with a minimum amount of personal investment. 

Understanding prop funding firms

Proprietary (prop) trading firms are companies that allow traders to access the firms’ capital to trade, rather than risk their own. In return, the prop firm will take a percentage of any profits earned, and may charge a monthly fee for access to trading platforms. 

Many prop firms operate remotely, so all you need is a desktop computer, laptop, or even a tablet or phone and an internet connection. Due to the highly liquid nature of the forex markets, which operate almost 24/7, it’s possible for competent traders to earn a lucrative second income stream, even when working a regular full time job. 

The structure of the prop firm will vary depending on their operational model, so it’s important to research the company and read the small print before you sign up. The most common model you will find is that the company has an evaluation program that allows you to prove your skills with a demo account before progressing to a funded account. 

This might sound daunting if you are a relatively new trader, but with some preparation it is perfectly possible to succeed. You’ll need to prove that you can manage market risk in accordance with the firm’s rules, such as drawdown limits and risk-per-trade requirements, and to achieve specified profit targets. 

In return, you’ll have access to significantly higher amounts of capital to trade with than you otherwise would, at no personal risk to your own finances. As well as capital, you’ll have access to the firm’s account management tools and a supportive online community. 

Scaled trading plans

The prop firm will typically offer a scaling trading plan, based on your level of experience and skill. The funding trading accounts usually begin at around $10k, but if you hit your profit targets it’s possible to progress to $100k or beyond. 

Many prop firms operate on the principle that the more consistent and successful a trader becomes, the more of their profit share they can keep, up to a maximum of 80 per cent. Therefore the most skilled and motivated traders can make substantial amounts of money with very little risk to their personal finances. 

Some traders even find that they are doing well enough to make forex trading their full-time career. This brings all the benefits of being your own boss, with the freedom to work wherever you are in the world and the hours that fit in with your lifestyle.  

What if you do not have much experience?

If you are an inexperienced trader but have made the effort to understand how the forex markets work and the principles behind a solid trading and risk management strategy, the best way to get access to a funded forex account is to use a prop firm with a two-step funding model.

This means that when you sign up, you will begin an evaluation process where you will need to hit a minimum profit target using a demo account or other simulated trading environment. This enables you can put your strategy into action without the stress of trading with real money. 

With a two-step process, you’ll need to pass an initial test, followed by a second test to make sure that you have a sound grip on the principles of forex trading and can be consistent in hitting your profit targets. This allows you to build up your confidence without being thrown in at the deep end, particularly if your previous trading experience is limited.

If you already have some experience under your belt, you may prefer to follow a one-step evaluation program. This means that you only need to pass one test before being given access to a live funded trading account. 

The most skilled and confident traders can bypass the evaluation stage altogether to access instant funding with a live account, provided they meet the prop firm’s criteria.