In the first two lessons of this chapter, we built our TradingView environment and learned how to work with it more efficiently.
Now we need to address another practical question: where do we actually trade, and whose capital do we use?
There are two main routes we will consider:
Trading with personal capital.
Trading through a funded programme offered by a Prop Firm.
Both approaches can be valid. They differ in how capital is accessed, who carries the financial risk, how much freedom we have, and what rules apply to the account.
The right choice depends on our experience, available capital, objectives, and ability to manage risk consistently.
In this lesson, we will understand how both routes work, look at some of the Prop Firms and brokers we consider, and establish a balanced progression for someone developing as a trader.
Two Ways to Access Trading Capital
Before looking at specific companies, we first need to understand the difference between using our own money and accessing a funded trading programme.
1. Trading With Personal Capital
With a personal trading account, we deposit and trade our own funds through a broker.
The main advantages are:
full control over the account;
no external evaluation rules;
greater freedom over how and when we trade;
profits generated in the account belong to us, subject to trading costs and applicable taxes.
The main disadvantage is equally clear: the capital at risk is ours.
Building meaningful trading capital from personal savings can take time, particularly at the beginning. If we want to trade a larger account, we need to provide that capital ourselves.
Losses are also borne directly by us.
A personal account therefore gives us greater freedom, but that freedom comes with full responsibility for the capital.
2. Trading Through a Funded Programme
The second route is a funded trading programme offered by a Prop Firm.
Instead of providing the full nominal account size ourselves, we typically pay an evaluation fee and attempt to pass a Challenge or similar assessment.
The evaluation normally requires us to reach a defined profit objective while remaining within specific risk limits.
If we satisfy the requirements, we can progress to the firm's funded stage under the conditions of that particular programme.
The potential advantages include:
access to a larger nominal account size without personally providing the full amount;
a relatively small initial cost compared with the nominal account size we may gain access to after passing the evaluation;
predefined risk parameters;
the possibility of receiving a share of eligible profits generated under the programme.
There are also important limitations:
we must operate within the firm's rules;
profit targets and loss limits may apply;
payout conditions depend on the programme;
our access to the account depends on the Prop Firm and its terms;
rules, platforms, fees, and programme conditions can change.
A funded account should therefore not be treated as if we personally own the nominal account balance.
The exact structure differs between firms. Depending on the programme, trading may take place in a simulated environment, with the company deciding how trader activity is evaluated, replicated, or otherwise incorporated into its own risk model.
For us, the practical distinction is simple:
With personal capital, we provide and risk our own funds. With a funded programme, we gain access to an account under rules established by the Prop Firm.
What Is a Prop Firm?
A Prop Firm, short for Proprietary Trading Firm, can provide traders with access to a trading programme under predefined performance and risk conditions.
In the retail funded-account model we are discussing, the process commonly follows a structure such as:
The trader enters an evaluation.
The trader attempts to meet the required objectives without breaching the risk rules.
If the evaluation is passed and all applicable conditions are satisfied, the trader progresses to a funded stage.
Eligible profits are shared between the trader and the company according to the programme terms.
The appeal is easy to understand.
A trader who does not personally have tens or hundreds of thousands of dollars available can potentially gain access to an account with a much larger nominal size for a considerably smaller initial cost.
However, access to larger nominal capital does not replace trading skill.
We still need to make good decisions, manage risk, and remain within the programme rules.
That is why a funded account makes much more sense after we have developed and tested a consistent trading process, rather than before.
Why FTMO Is Our Primary Reference
There are many Prop Firms available, and their programmes can differ significantly.
Within the Academy, FTMO is our primary reference.
It has operated in the industry for a number of years and is one of the better-known names in the retail Prop Firm space.
Some of the reasons we prefer it include:
established operating history;
clearly presented trading objectives and rules;
structured evaluation process;
professional support and infrastructure;
an established payout process.
This does not mean that using FTMO removes risk or that its conditions will always remain unchanged.
A Prop Firm is still an external company. Its rules, available platforms, account types, fees, and programme conditions can evolve.
For this reason, we should always review the current conditions before purchasing an evaluation or making decisions based on a particular programme.
In the next lesson, we will look much more closely at the FTMO process itself and how a trader can approach an evaluation responsibly.
Funding Pips as an Alternative
Another company we can consider is Funding Pips.
It is an alternative within the funded-trading space and offers its own evaluation structures and account conditions.
When comparing it with FTMO or any other Prop Firm, we should look beyond the price or nominal account size and review factors such as:
risk limits;
payout rules;
trading restrictions;
evaluation structure;
platform availability;
current account conditions.
The cheapest Challenge is not necessarily the one that best fits our trading style.
FTMO will remain our main reference throughout this part of the Academy, but understanding that alternatives exist is useful when evaluating the funded-account market.
Understanding Prop Firm Risk
Prop Firms can provide useful access to trading capital, but they also introduce a form of dependency that we do not have in the same way with our own brokerage account.
We depend on another company's programme and its continued operation.
The Prop Firm industry can change quickly. Companies can modify their conditions, restrict particular strategies, change trading platforms, alter payout policies, or encounter operational difficulties.
For that reason, we do not want our entire trading activity to depend permanently on one company.
A more balanced approach is to:
avoid relying exclusively on a single Prop Firm;
maintain or gradually build personal trading capital;
understand the current rules before entering an evaluation;
withdraw eligible profits rather than treating a funded account as a place to hold personal savings.
Once withdrawn, those profits can also contribute to building capital that we control directly.
That brings us to the second side of the equation: personal brokerage accounts.
Brokers for Personal Capital
If we decide to trade or invest using our own funds, we need a broker rather than a Prop Firm.
The distinction is important.
A Prop Firm programme gives us access to trading under the firm's rules.
A broker provides the infrastructure through which we access financial markets using our own account and capital, subject to the products, services, regulations, and conditions available to us.
There is no single broker that is ideal for every trader.
The appropriate choice depends on factors such as:
where we live;
the markets and instruments we want to access;
regulation and investor protections;
fees and commissions;
execution conditions;
available platforms;
account requirements.
The following companies are examples we consider, not a ranking. The appropriate broker depends on the individual trader and the services available in their jurisdiction.
Interactive Brokers is particularly relevant for traders and investors who want broad access to global financial markets.
Its main characteristics include:
access to a wide range of markets and instruments;
professional trading tools;
competitive pricing structures;
an established regulatory presence across multiple jurisdictions.
Its breadth of functionality can also make the platform more complex for someone opening a brokerage account for the first time.
AMP Futures is primarily relevant to traders interested in futures markets.
Its characteristics include:
access to futures markets;
competitive trading costs depending on the setup selected;
support for multiple professional trading platforms.
This makes it a more specialised option than a general multi-asset broker.
XTB can provide a relatively accessible environment for traders and investors who prefer a straightforward platform experience.
Its characteristics include:
an intuitive platform;
access to multiple financial products, depending on jurisdiction;
relatively simple navigation;
customer support infrastructure.
The exact instruments and conditions available depend on the trader's country and account type.
eToro is known for combining trading and investing functionality with social features.
Its characteristics include:
relatively simple account navigation;
an accessible platform interface;
trading and investment functionality;
social and copy-related features.
As with any broker, available products, costs, protections, and account conditions depend on the jurisdiction and account type.
We will return to platforms and execution in greater detail as the course progresses.
A Balanced Progression
For someone who is still developing as a trader, we do not need to treat personal capital and funded capital as competing choices.
They can serve different purposes at different stages.
A balanced progression could look like this:
1. Learn and Practise
We first focus on:
learning the strategy;
understanding risk management;
backtesting;
practising in a Demo environment.
There is no reason to pay for access to larger capital before we have demonstrated that we can manage a trading process consistently.
2. Attempt a Funded Evaluation
Once our process has been tested and we can follow it consistently, we can consider a Challenge.
The objective is not simply to reach the profit target.
We also need to demonstrate that we can operate within the required risk limits.
3. Build a Track Record and Withdraw Profits
If we reach a funded stage and begin generating eligible payouts, the next objective is consistency.
Rather than leaving funds unnecessarily within the programme, part of those payouts can be withdrawn.
4. Build Personal Capital
Over time, a portion of the profits generated through funded accounts can be transferred into a personal trading or investment account.
This gradually reduces our dependence on external funding programmes.
A trader might eventually operate, for example:
one or two funded accounts;
alongside a smaller personal account.
The balance can change as personal capital grows.
The long-term objective is not simply to control the largest funded account available.
It is to develop the skill, track record, and personal capital that give us greater control over our trading activity.
A Practical Example
Imagine that a developing trader has $2,000 of personal capital available.
For the purpose of this example, consider two possible approaches.
The first is to deposit the entire amount into a personal brokerage account and begin trading it.
This provides direct control over the account, but every trading loss comes directly from the trader's own capital.
The second approach is to continue practising in Demo and first demonstrate that the strategy can be applied consistently.
Only after reaching that point might the trader decide to allocate a portion of the available money toward a Prop Firm evaluation rather than committing the full $2,000 to trading.
If the evaluation is passed, the funded stage is reached, and the trader eventually becomes eligible for payouts, part of those profits could then be transferred into a personal account.
Over time, the trader may operate both.
The funded account provides access to a larger trading programme, while the personal account gradually becomes capital that the trader controls directly.
There is no guarantee that an evaluation will be passed or that a funded account will generate payouts.
That is precisely why the sequence matters.
We do not begin with the largest account we can access.
We begin by developing a process that can be applied consistently before increasing the capital involved.
Your Turn
Before moving forward, think about how the two routes could apply to your own development as a trader.
You do not need to open an account or purchase a Challenge.
Instead, compare personal capital and funded capital using what we have covered in this lesson.
Ask yourself:
Who provides the capital?
Who carries the financial risk?
What rules apply?
What happens to the profits?
How dependent are we on another company?
Then consider the progression we discussed:
Learn → Backtest & Demo → Funded Evaluation → Funded Stage → Withdraw Profits → Build Personal Capital
The objective is to understand why each stage comes before the next.
The Xcelerate Trade Perspective
Access to more capital can be useful, but capital does not solve the problems that prevent a trader from being consistent.
A larger account does not improve our entries, strengthen our discipline, or correct poor risk management.
This is why we view Prop Firms primarily as a capital-access tool, not as the objective of trading itself.
For a developing trader who has demonstrated consistency, a funded programme can provide a way to work with a larger nominal account without personally committing the same amount of capital.
At the same time, we do not want our long-term progress to depend entirely on an external company.
Our preferred direction is therefore balanced: use funded opportunities carefully when they make sense, withdraw profits when they become available, and gradually build capital that we control ourselves.
The goal is not to pass as many Challenges as possible.
The goal is to become a trader capable of managing capital responsibly, regardless of where that capital comes from.
In the next lesson, we will take a closer look at the funded-account process using FTMO as our main example. We will examine the evaluation structure, account sizes, risk rules, Free Trial, profit sharing, and the steps we recommend before paying for a Challenge.
See you in the next lesson!