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Funded Account vs. Personal Live Account

With the rising popularity of prop trading, many Forex traders wonder what is better: to trade with a prop firm or on your own. There are arguments for and against both options. Some traders praise prop firms while others strongly oppose them. This article explores the pros and cons of both trading with a funded account and trading with a personal live account.

Funded account

A funded account is a term used to describe an account funded by a prop firm, not the trader themselves. It can be a demo account, profitable trades from which will be copied to the firm's live account, or a live account with real capital. Whatever the case, the trader uses the firm's funds to make trades, not their own.

Let us see the pros and cons of such an approach.


There are plenty of pros associated with trading a funded account, such as:

  • large capital
  • larger profits
  • limited risk to the trader
  • less stressful trading environment

Let us look at the pros in more detail.

Large capital

The main draw of prop trading, especially for new traders, is the fact that it allows them to trade relatively large accounts. While a very successful long-term trader can have the same or even bigger account size as funded accounts, most beginner traders do not have thousands of dollars to burn. For them, a chance to trade a $25,000, $50,000, $100,000, or even bigger account provides a great opportunity. It allows them to make trades, which they would not be able to make otherwise, or to make a bigger number of trades. Of course, it also can increase the value of profitable trades. This leads to the next point.

Large profits

A bigger account means that potential profits can be also bigger. Let us assume that your strategy allows you to generate 10% profit over the set period of time. With a $1,000 account that would mean just $100 in profits. But with a $100,000 account, you will earn $10,000. Of course, in the case of a funded account, you will have to share your profits with a prop firm. But even if, for example, the firm takes 20% of profits, you will still remain with $8,000 in your pocket. Of course, if you have $100,000 lying around, you could use them to trade and earn the same amount of profits without a need to share with anyone. But you would also not share the risk. This leads us to the next point.

Limited risk to the trader

The logic here is simple. If you are trading with other people's money, you risk other people's money. Not your own. This means that your financial risk in case of unsuccessful trades is just a fee you have paid to the firm for it to fund you. If you paid the firm $500 and lost $10,000 during trading, you lost just $500. On your own personal account, the same trades would lead to a $10,000 loss.

Admittedly, there is another risk. That is to lose your funded account completely. After all, prop firms want to earn money with the help of traders they fund, not to lose them. Still, it is easier to recover from a large loss in a funded account than in a personal live account. That is because a loss of a funded account does not bar you from trying to join a prop firm again, be it the same firm you were trading with before or another one. And that means a less stressful trading environment. Which is another point in favor of trading with a funded account.

Less stressful trading environment

For the vast majority of people, losing their own money is much worse than losing someone else's money. A string of poor trades on a personal live account can threaten the livelihood of a trader. And can lead to serious psychological stress. In contrast to that, you do not risk that much trading with a funded account. And that not only helps your psychological wellbeing but also helps to approach trading more objectively, making decisions based on cold logic, not emotions.

That said, this point is highly contested among traders. Yes, it is nice to not be afraid to lose thousands of dollars from your own capital. But strict demands and limitations that prop firms usually impose on funded accounts can be their own source of stress for a trader. But this will be discussed in the cons of funded accounts. Speaking of which.


While trading with a funded account can look very enticing to Forex traders, opponents of prop trading have a number of arguments against it. Here are several of them:

  • strict rules
  • limitations to the withdrawal of funds
  • risk of scams
  • capped account size

Let us look at those points in more detail.

Strict rules

Prop firms typically impose strict requirements and limitations on their traders. This is fair considering the firm risks its own money, and the firm's goal is to earn money, not to lose them. But those rules can severely limit traders in terms of strategies. This may result in traders abandoning very profitable strategies for less profitable ones or tweaking a trading strategy to the point it stops being a profitable one. The limitations and requirements may put additional stress on a trader, especially if they include a profit target and a time limit. That not only can be detrimental to the trader's psychological health but can also lead to sub-optimal and outright bad trades.

Limitations to the withdrawal of funds

It is good to have the ability to withdraw the money you have earned on your account any time you need them. But that is usually not an option with funded accounts. Typically, prop firms allow withdrawal of funds once or twice a month on specific dates. While this is not the end of the world, it is still a negative feature of funded accounts.

Risk of scams

Unfortunately, there is almost always a risk of a scam when you entrust your money to someone else. And you can stumble on scammers regardless of whether you trade with a funded account or with a personal live one. But prop trading, being very appealing to new and inexperienced traders, is especially attractive to scammers. And sometimes it can be hard to distinguish a legit prop firm from a bad one. The lack of regulations for prop firms further increases the risk for traders who want to open a funded account. Meanwhile, you can usually find a well-regulated Forex broker if you want to trade a personal live account.

Capped account size

It is good to have a funded account when you are just starting trading as you are unlikely to be able to afford the account size prop firms can offer you. But that can change after a while if you are a successful trader. As you continue to trade and earn money, the account sizes offered by prop firms may start looking less than impressive. And while prop firms can often offer an increase of the funded account size to a successful trader, there is still a hard cap on how big your account size can be if you are funded by a prop firm. Meanwhile, your personal live account theoretically does not have a limit to its size.

Personal live account

The concept of a personal live account is very simple to understand. You put your money into the account with your Forex broker. You trade. All the money you earn is yours to keep. But you are also paying for all the mistakes you make from your own pocket. You do not share your profits with anyone (bar the broker fees and taxes), but you also bear all the risks.

In many ways, the pros and cons of a personal live account are opposite to those of a funded account. But it still can be useful to take a more detailed look at them.


So, what pros of a personal live account. They are:

  • no restrictions and limitations
  • no profit-sharing
  • theoretically unlimited account growth
  • unlimited withdrawal of funds

Let us take a close look at those pros.

No restrictions and limitations

One of the main draws of a personal live account is the freedom to choose your approach to trading. Nobody can tell you how and when you can trade (though you still have to trade within the limits of laws and regulations, of course). Nobody dictates what trading strategies you can or cannot use. You can make as many trades as you want (and your capital allows) in hopes to catch enough profitable ones to offset the losing ones. Or as few as you want, trying to only make trades that you are certain will be profitable. You are free to make risky trades in search of a big profit. Or you can choose to make only conservative trades that will allow you to grow your account slowly but steadily. If you devised a profitable trading strategy, you can use it how and when you want as well as tweak it however you see fit. In short, you have complete freedom regarding how you decide to trade.

No profit-sharing

This is a simple one. When you are trading with your own money, all the profits are yours to keep.

Theoretically unlimited account growth

A funded account has a hard cap on its size. And while the size of a funded account may look very big at first, for a successful trader it will start looking less and less impressive as they earn more and more money. Meanwhile, if a trader compounds their profits on their personal live account, the account can in theory continue to grow without any limit. That is why trading your own personal live account is considered to be more profitable in the long term. At least, if you are a successful trader, that is. Of course, an unsuccessful trader runs the risk of wiping out their personal live account. But then again, an unsuccessful trader will not be able to get a funded account anyway.

Unlimited withdrawal of funds

Typically, on a personal live account, you can withdraw funds whenever you want. The flexibility in using the money for your profits is yet another advantage of a personal live account.


However good a personal live account is, there are also downsides to using it. Such as:

  • limited capital at the start of your trading
  • risk of losing your money
  • stressful trading environment

So, let us discuss the cons in more detail.

Limited capital at the start of your trading

Now, if you are a millionaire, this may not apply to you. But chances are, you are not. That means you have a limited amount of money to invest in your account. And a smaller account size means smaller potential rewards and a lower number of trades you can have simultaneously. Additionally, the smaller the account size, the bigger the chance to wipe out it completely. This brings us to the next point.

Risk of losing your money

On a funded account, losing a large amount of money does not mean much. Even if it results in losing your funded account, you can still try to pass the evaluation at the same firm again or just join another one. Ultimately, you do not risk much and do not lose much. That is not the case with a personal live account. Any money you have lost to an unsuccessful trade is the money that has just disappeared from your pocket. And if your account is wiped out, you cannot simply open a new one. Unless you just happen to have spare money lying around. But if you continue to burn your money, that can endanger your financial stability. Of course, any trader should practice risk discipline to limit losses they can potentially make. But with small account size, it can be hard to limit your risk and at the same time also have a chance for decent profit (or even any profit at all). And risking your own money can be very stressful. This leads us to the next negative of a personal live account.

Stressful trading environment

Risking your own money can be very stressful. The fear of losing all their money can take a heavy psychological toll on a trader. And people usually have an emotional attachment to their money. Therefore, trading with your own money runs a risk of making trades based on emotions, not on reason. And that can lead to more losses, which will lead to more bad trading decisions. Newbie traders are especially vulnerable to this due to their inexperience as well as their, usually, small account size. After all, the less money you have, the more every loss hurts. That said, growing your personal account beyond a certain point can also present a psychological challenge. That is because with more money you will likely be making bigger trades. This means a bigger profit potential but also bigger potential losses. And that can create a psychological barrier. After all, it is much easier to make a decision when a mistake means losing just $10 or $100 than when the cost of one mistake is $1,000 or $10,000.


The choice between a funded account and a personal live account is ultimately the choice between safety and freedom. With a funded account, you share risks but also share rewards. You risk other people's money but that allows other people to dictate to you how to trade. With a personal live account, you reap all the rewards but also bear all the risks. And it is up to you to decide which option is better. But if you find each of them to have certain appealing points, remember that these options are not mutually exclusive. You can very well open your own personal live account and a funded account (or even several) at the same time.

If you want to share your opinion, observations, conclusions, or simply to ask questions regarding trading with a funded account versus trading with a personal live account, feel free to join a discussion on our forum.