What is funded account?

A funded account, also known as a trading account with external capital, is a type of financial arrangement provided by proprietary trading firms or funding providers that allows traders to simulate trades using someone else's capital. Here's a detailed explanation:

1. **Access to Capital**: Funded accounts provide traders with significant capital, often ranging from €25,000 to €150,000, without the need for personal financial outlay, thus markedly reducing the trader's financial risk.
2. **Profit Structure**: The primary functionality of a funded trading account is to provide traders with enough capital to trade at a scale that can lead to significant profits, which are then split between the trader and the funding provider.
3. **Entrance Criteria**: Securing a funded trading account involves meeting certain entrance criteria, such as completing a challenge or passing various assessments, which are set by the funding company.
4. **Payout Structure**: The payout structure for funded accounts should be clear and easy to follow, with a quick withdrawal process and defined rules for sharing profits.
5. **Account Resets**: Some funded accounts allow for account resets, which can be beneficial for experienced traders looking for a fresh start.

In summary, a funded account is a way for aspiring traders to gain experience and potentially earn profits in the markets without risking their own capital. However, it's important to carefully consider the terms and conditions of the funding arrangement and to be aware of the potential risks involved.