What is funded account?

What it means

Whether the account trades real capital varies by firm and is often not disclosed clearly. Many firms operate the funded stage as a simulated account and pay profit shares from their own balance sheet, which is legal and disclosed in the terms but rarely emphasised.

Why it matters

The rules do not relax after funding. Daily loss limits and maximum drawdown continue to apply, and in many cases the drawdown becomes trailing rather than static — which is materially harder, because the threshold follows your equity high upward and never comes back down.

What this changes in practice

The practical consequence for automated trading is that the bot's risk settings must be derived from the firm's limits, not from a generic percentage. A 1.5% default is fine against a 10% maximum drawdown and reckless against a 4% daily limit — see the prop firm drawdown calculator.