One of the biggest challenges retail traders face is access to capital. You might be able to grow a small account slowly with realistic monthly returns of 1–3%, but if you’re starting with $5,000 or even $10,000, those gains won’t amount to much in dollar terms.
That’s where proprietary trading firms (prop firms) come in. Prop firms allow skilled traders to access large trading accounts—sometimes up to $200,000 or more—in exchange for passing a structured evaluation process. In return, the trader keeps a percentage of the profits they generate.
In this guide, we’ll break down what prop firms are, how the funding process works, what the risks are, and how to decide if getting funded is the right move for you.
What Is a Prop Firm?
A prop firm, short for proprietary trading firm, is a company that lets qualified traders trade with the firm’s capital. To protect their money, most prop firms use a “challenge” system to test your skills before granting access to a funded account.
These challenges typically involve trading a demo account under strict rules. If you pass, you receive a funded account and a profit split on your earnings—often between 70–90%.
How Prop Firm Challenges Work
While each firm may differ slightly, most follow a similar two-phase challenge structure. Here's how it typically works, using DNA Funded as an example:
Account Sizes
DNA Funded offers several account sizes ranging from $5,000 to $200,000. One of the most popular options is the $100,000 account, which has a one-time fee of $549.
Challenge Parameters
To get funded, you must pass a two-phase challenge: - Phase 1: Reach a 10% profit target ($10,000 on a 100K account) - Phase 2: Reach a 5% profit target ($5,000)
Throughout both phases, you must also avoid: - Daily drawdown limit: 6% ($6,000) - Total drawdown limit: 10% ($10,000)
Traders are usually given a minimum number of trading days, such as 3, to discourage reckless, one-day gains.
Once both phases are complete, you receive a funded account—but the rules stay in place. Breaching the loss limits will result in losing your funded status.
What Happens After You Get Funded?
If you succeed, you’ll start trading a real account—typically a simulated account where your trades are mirrored on the firm’s backend. On profits earned, you’ll receive a profit split, which is 80%-90% with DNA Funded.
For Example:
Earn $2,000 on a $100,000 account → keep $1,600 (80%)
Traders also retain access to the same drawdown rules. The moment your account drops below the allowed threshold (e.g., 10% total loss), the funded account is revoked.
The Truth About "100K" Funded Accounts
It's important to understand that while a funded account may be labeled as $100,000, you're effectively working with $10,000 of risk capital—because once your losses exceed 10%, the account is closed. This isn’t a scam—just a risk control mechanism used by every reputable prop firm.
Still, it’s a strong opportunity: for a relatively small fee (e.g., $549 or less), you can access much more capital than most retail traders can on their own.
Who Should Not Try to Get Funded (Yet)
Prop firms are not for everyone. In fact, over 95% of retail traders fail the evaluation challenge.
why?
No proven trading system or edge
Lack of live trading experience
Poor risk management
Impulsive behavior under pressure
If you don’t already have a track record of consistent profitability, getting funded is not the place to start. Instead, focus on building your edge, journaling your trades, and developing discipline.
When Getting Funded Makes Sense
Getting funded can be a game-changer if you are already a consistent trader. With a solid edge and proper risk control, you can dramatically scale your returns without risking your own capital.
And if you're ready to take that step, consider trying a reputable firm like DNA Funded.
Use code A1T20 for 20% off your challenge fee with DNA Funded
How to Calculate the RIGHT Lot Size for Forex Trading
Lot size is one of the most critical components of risk management in forex trading. Many traders focus on entry signals or technical setups, but if your position is oversized, even the best idea can lead to unnecessary losses.
This guide will walk you through the most important principles of risk management in trading — the stuff that actually matters if you’re serious about long-term success.
If you’ve spent more than five minutes on trading YouTube or Instagram, you’ve probably seen someone claiming they make 1% per day—every day—trading forex, futures, or stocks. At first glance, it sounds like a reasonable goal. After all, 1% doesn’t sound like much, right? But when you dig a little deeper, that number becomes a red flag—not a realistic benchmark.
The difference between occasional 1% gains vs. averaging 1% per day
Why this target is unrealistic for consistent trading
LINDEX is a leading financial analysis and trading education company dedicated to empowering traders of all levels. Our team combines extensive market knowledge with cutting-edge technology to provide valuable insights and tools for traders worldwide.
Leveraged trading in foreign currency contracts or other off-exchange products on margin carries a high level of risk and is not suitable for everyone. You may lose more than you invest. Price and performance data is provided for informational purposes only and is not investment advice. Past performance is not indicative of future results.
There is a significant degree of risk involved in trading securities. With respect to foreign exchange trading, there is considerable risk exposure, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.
