How Trader Funding Programs Work
How trader funding programs work, that’s exactly what we’re going to cover in this video.
Plus, we’re going to cover why some trader funding firms want you to fail, how to reach your monthly income target within the next two months, benefits of becoming a funded trader, and lastly, I’ll help you to pass your challenge and get trader funding. So stick around. How trader funding programs work. Proprietary trading companies, otherwise known as prop firms, will fund traders who can pass a live trading test, usually known as a challenge.
The challenges are done on a demo account and monitored by the prop firm. There are a few rules which you need to abide by, with the main ones being that you need to reach a set profit target without losing a certain amount, within a set amount of time.
If you pass the challenge, then the prop firm will give you the logins to an account that’s funded with anywhere between $5,000 and $1 million of their own money. You trade this account, and when in profit, you get to keep anywhere from 30% to 80% of the profits that you make, depending on the firm, the rest the prop firm keeps. Now, some prop firms will increase your account size if you show good risk management and you’re a consistent trader. Typically, they’ll increase your account up to around $2 million. Now, all this doesn’t come for free. It’s expensive to run a prop firm and they’re not charities, so you pay a small fee to take a challenge in the first place. This goes towards running the company, paying wages, et cetera.
Some companies will refund your challenge fee once you pass the challenge. So if you’re a profitable trader, then it actually doesn’t cost you anything. Typically, you can withdraw your profits anywhere from two weeks to one month, each firm has different assets that you can trade across Forex, digital currencies, stocks, indices, and commodities. Now, you might be thinking, “But I don’t have a degree in finance, economics or accounting, how could they possibly hire me? On top of that, I don’t have a long track record to show proof that I can trade.” Well, the good news is most prop firms don’t require any of these, including us at Traders With Edge. The only thing that matters is that you pass the challenge within the time frame, given without violating any rules.
The benefits of becoming a funded trader. The first thing most traders think about when getting funding is how much money they can make. That’s all good, and there are some hidden benefits like reducing the fear of trading. When not trading your own money, some people say it removes some of the fear of losing. This, in turn, can help the trader keep a clear head and make better choices, taking the pressure off performing. Usually when traders have a small account, they try too hard to force trades to make their income goal, which causes them to take trades which they know are not right in the first place. Think about it. If you have a $2,000 account and you are pushing to make 10% a month, which is damn hard to do consistently, you still only walk away with $200 a month. If, on the other hand, you had a million-dollar account and just made 2% per month, then you bank $16,000 per month, if you’re keeping 80% of the profits. Less pressure and more profits.
We actually made a calculator on our website, traderswithedge.com, for you to figure out just how little you need to achieve to make a good monthly income. I’ll put the link below this video. Why some trader funding firms want you to fail. Like brokers, many prop firms make money from traders failing, and so some have an interest in you failing. The ways they usually do this, they make it seem simple upfront, and then have lots of hidden rules in fine print, that if you violate you will fail the challenge. It’s your responsibility to read through all the boring stuff and make sure you fully understand what you’re signing up for. So make sure you read the full terms and conditions of the prop firm that you’re looking to trade for. The second way they can stack the deck against you is if they have their own brokerage, and you must trade through that brokerage. You need to remember that if they do this, they have full control over the trading conditions, including how wide the spread is, the commission’s payable, the data feed delays, and much more.
Typically, if a prop firm has their own brokerage, it’s not licensed by any reputable governing body because they’re not taking retail clients so they don’t need to be. So basically, they can do whatever the heck they want. Just keep this in mind. Now, to be clear, I’m not saying that all prop firms are evil and they want to steal your money. I’m just pointing out that in life, there are people who have hidden agendas that will it them more than you think. So pay attention to the prop firm that you’re signing up with before you hit that buy button. Lastly, I promise to help you pass your challenge and get trader funding. We’ve actually written a guide that teaches you this, that we sell on our website. But because you’ve made it this far in the video, I’m going to give you a coupon code to get it for free. I’ll put the link below this video and just use the code ‘pass’ at checkout to get it for free. If you like this video, give us the thumbs up, and subscribe for more videos like this. Click here for your free guide
Remember to apply the coupon code pass at checkout.
