7 Benefits of Using Funded Trading Accounts

Looking to boost your trading strategy with more capital or hone your skills? Funded accounts allow the funded trader to access the forex market without needing to risk their own capital, benefit from expert coaching, trade with low spreads, and best of all, potentially increase returns. 

Let’s dive into the prime benefits of trading with a funded account.

The Benefits of a Funded Account 

Trade with Larger Capital 

Limited capital can negatively impact overall performance regardless of the trading strategy used. In some cases, low funds can affect the type of trading strategies (DCA, for example) you can use.
With a funded account, you (the funded trader) gain access to larger trading capital (up to $500,000 with IC Funded) that allows you to maximize your results.

For example, with a larger capital, even small wins can translate to significantly bigger outcomes. Imagine making a 2% trade with $1000—that is just $20. But with a $500,000 trading account, the same 2% is $10,000.
A larger trading account size also allows you to spread your capital across more positions. This portfolio diversification can potentially reduce the impact of losing in a single trade.

Do Not Need to Risk Your Own Money

Funded accounts from prop trading firms are trading accounts that are supplied with capital by the prop firm itself. So traders do not have to risk their own funds to engage in the financial markets. Instead, they are given a specified amount of capital based on their evaluation success or the account size purchased.
Forex traders also get to keep up to 80% of what they generate in most cases. In general, it is a win-win situation: you get to trade without risking your own capital and still keep the larger share of the returns generated.

Develop Your Trading Skills in a Realistic Market Environment

Most prop firms provide traders with in-depth performance reviews and feedback. This is invaluable in pinpointing areas for improvement and growing analytical and technical skills.
They can assess your risk management strategies, discover emotional biases impacting your forex trading decisions, and provide advice to refine your strategy.
In addition, prop firms like IC Funded provide access to sophisticated trading platforms such as MetaTrader 5, as well as analytical tools, educational videos, and market data feeds.
These resources can help you make informed trades, perform in-depth market analysis, and identify opportunities, all of which are crucial for trading success.

Benefit from Professional Guidance and Coaching

Prop firms need you to succeed as a trader because you’re trading with their capital. To ensure this, they offer traders educational resources, including real-time or pre-recorded coaching sessions.
These coaching sessions are usually done by expert traders and professionals with strong track records in trading the markets. Traders have access to coaches through video calls, written articles, podcasts, etc.
Some of the practical ways these seasoned traders help coach new users are by providing battle-tested strategies that have been proven effective in real-world scenarios, helping traders create a trading plan that aligns with their risk tolerance, goals, and trading style, as well as reviewing their current trading activity.

Reduced Emotional Bias 

Knowing that you’re not risking your own capital can help to reduce some emotion from your trading decisions. When trading with your own funds, the fear of losing or the lure of quick returns can negatively impact your judgment.

Funded accounts, however, eliminate the consideration of personal loss by providing you with the needed capital to execute trades.
This enables you to be more objective and make better decisions based on your market analysis and trading strategy, not emotional impulses.

Automated Risk Management (Daily Drawdown) 

Daily drawdown (loss) limits may seem restrictive at first, but they provide several benefits to the trader. For example, the daily drawdown encourages traders to maintain discipline and incorporate comprehensive risk management guidelines, as hitting it means that they’ll lose the account.

This trading condition forces traders to be consistently mindful of using the right position sizing and focusing on making consistent small results, which is what prop firms look for (consistent performance). Plus, knowing they can't recover huge losses quickly, the presence of drawdowns makes traders more patient to wait for high-probability setups.
It also encourages traders to learn to prioritize trading capital preservation and avoid impulsive decisions that could lead to large losses.

Performance-based Rewards

The direct connection between your trading performance and earnings is highly motivating. Prop firms reward successful strategies, encouraging the funded trader to sharpen their trading skills and strategies.
A recent study showed that traders who perform well continue trading after consistent wins, while those with poor performance stopped trading altogether. This revealed a correlation between trader performance and motivation to trade.
The performance-based structure also creates a sense of shared goals, where both you and the prop firm are working together to achieve positive results, creating a collaborative environment toward the same goal.
That said, the major perk of performance-based rewards is that you can boost your funded account's share by maintaining consistent, successful results. This allows you to increase your earnings.

Conclusion

Getting a funded account provides numerous benefits to the funded trader, such as risk-free trading with personal capital, performance-based rewards, high trading capital, reduced emotional bias, expert coaching access, and automated risk management.
The funded trader also gets to develop their trading style in a professional trading environment through invaluable feedback and reviews of implemented strategies.
In general, a funded trading account provides a lot of benefits to experienced traders.

Get an IC Funded Account as a Funded Trader 

IC Funded is an excellent choice for getting funded accounts. The prop firm allows traders to get up to 80% / 20% split on any funded account and much more.