HOW DOES A FOREX FUNDING PROGRAM WORK?
Benefit from the huge financial power of a proprietary trading firm
Forex funding programs offer career-changing opportunities to a Forex trader. Use the power of a proprietary trading firm, while you contribute the power of your unique trading skills to grow the capital of the prop firm. You get a fair share of the profit, while benefitting from an array of advantages.
While many Forex funding programs require initial exams or demo account work, there are also programs that welcome both low-risk traders and aggressive traders to trade their capital immediately in the real market, generating profit for the trader and the prop firm.
What is a Forex funding program?
Proprietary trading firms offer several types of Forex funding programs. When joining a Forex funding program, a Forex trader receives access to capital which they trade in return for their trading skills. The prop trading firm offers a set of conditions with which the trader must work. The specific conditions differ from prop firm to prop firm, but generally involve a certain profit target and a stop loss level. A trader must also show a consistent method of trading to minimize risks, as data suggests that a more consistent trading strategy is the most successful strategy.
Most Forex funding programs welcome both low risk traders and aggressive traders. It goes without saying that parameters will differ depending on one’s trading style. That is why a trader must know their trading style well before applying to avoid deceptions or complications.
The power of a prop firm
Most prop firms have enormous financial power. They want their capital to grow and are looking for talented, successful traders who can trade their money efficiently. Instead of contracting Forex traders on their payroll, independent Forex traders tend to be more effective and successful when trading in their own style without supervision.
Obviously, when a FX trader receives a substantial amount of the realised profits, they will apply all their efforts to utilize the funds to the fullest. When a firm is working with independent contractors, it can be sure that their aim is to realize as much profit as possible. A independent trader has a different set of motivations than a payroll trader.
Of course, the main objective of a prop firm is profit, hence their objective for capital growth. That is why prop firms tend to be rather strict with the stop loss level. When a certain loss is realised, this can result in termination of the trading account. After all, prop firms are hardly philanthropic institutes, and they want to protect their capital while limiting risk.
Advantages of a Forex funding program
For a trader, a Forex funding program offers many different opportunities:
Access to substantial capital
With a fully funded Forex account, an FX trader receives access to substantial capital. Around 90% of independent Forex traders worldwide trade with a capital of less than £100,000. Of course, a capital of this size can result in substantial profits, depending on the skills of the trader, but often it remains a source of secondary income.
With the capital of a Forex funding program behind you, you can receive access to capital of £1,000,000 or more. It goes without saying that a capital of this size is far more advantageous, and profits are exponential. With a million pounds of capital, one can achieve a leverage of dozens of millions, and make trades that really make an impact on profit.
Not risking your own capital
Another great advantage of joining a Forex funding program is that you are not risking your own capital. This can significantly impact one’s trading confidence and style. You are an independent trader with the aim of maximizing your profit and can use the capital purely as a tool to do so. Risk and loss are viewed without emotion as an inevitable part of the process, compared to the stress of trading your own money.
This distance makes FX trading far more rational than emotional. When you are about to go all-in with a deal you believe in 100%, you will be more inclined to do so with other people’s money, than with your life savings. You do not have to think about what else you could have done with your own capital; you freely use the capital of the prop firm, even if it means going all-in.
Using the best tools
Of course, every trader uses a trading platform, but a trading platform is often chosen exclusively based on the broker of choice. When you become a part of a Forex funding program, you will likely receive access to state-of-the-art Forex trading platforms. This can already boost your trading career.
Trading platforms like MetaTrader 4 are the worldwide standard for Forex brokers, and give you access to the tools you need to become successful as a Forex trader. That success is even more likely when you receive a funded Forex account.
In a funded Forex program, you are not alone, but are part of a community with other FX traders. Often, networking events are organized so you get know your fellow traders, while comparing results on the leader board. Everyone wants to be on top of that list and pushes one another to earn the maximum from their capital.
This dynamic is absent when Forex trading independently. For many traders, a trading community is extra motivation to surpass your fellow traders. Often, prizes are involved as well, making victory that much sweeter.
Guidance and support
Not only can you learn from your fellow Forex traders, but most Forex trading programs also have an academy with resources to help you become a better trader. Trading courses, opportunities, workshops, and coaching will help you to improve your trading strategies and your chances for higher profits.
What about the profit share?
An important feature to consider is the profit share you receive from the Forex funding program. The most common profit share is a 50% split. You receive 50% for your trading skills, time, and efforts. The prop trading firm receives 50% for taking on the risk and providing the capital.
Many independent traders are reluctant to settle for ‘just’ a 50% profit share. The profitability of this proposition depends on one’s skills and the value of your own capital. When trading a capital of £1,000,000 is possible through a Forex funding program, and a trader typically has access to a capital of £100,000, 10 times more profit can be made by trading through the Forex funding program. When the trader keeps 50% of the profits, they still receive 5x more profit than when trading personal capital.
It is always better to share a large pie, than having to keep a small pie to yourself. The many other benefits of joining a Forex funding program make it an excellent opportunity for almost any trader.
How to join a Forex funding program?
For most Forex funding programs, an initial exam is required for qualification to join. When you have passed the test, you must begin by working on a demo account or an evaluation account, in which a real market situation is simulated. These two steps are built-in to minimize the firm’s risk of losing capital to incompetent traders.
Fortunately, there are also Forex funding programs that do not require a test or demo account. Here you can begin trading real money in the real market immediately. When you show consistent trading methods and are consistently reaching your profit targets, you can grow your trading capital to £1,000,000, after reaching a few milestones.
Advantages of a Forex funding program
As a Forex trader you benefit from the following by joining a Forex funding program:
- Independent trading
- Access to capital through a funded trading account
- Not risking your own capital
- Serious profit share
- Being a part of a community
Do you want to join a Forex funding program? Forex Traders UK is a London-based proprietary trading firm that offers you the opportunity to join a funded Forex program. You can start FX trading with real money in the real market without initial exams or demo accounts. The Forex funding program of Forex Traders UK offers you a guaranteed capital of £1 million.
Forex Traders UK offers you the possibility to start with a capital of £10,000 to £70,000. Your capital quadruples when you hit your first milestone (10 to 25% profit margin, depending on your trading style). After the initial milestone, your capital is doubled every time you reach a subsequent milestone.