A "free funded forex account" typically refers to a trading account that is funded by a third party, often a forex trading firm, allowing a trader to trade without having to make an initial investment. These types of accounts are commonly offered as part of various promotions or trading challenges, where the broker or trading firm provides the funds for trading, with the goal of sharing profits based on the trader's performance.
Here's how these programs generally work:
1. Trading Challenges:
Some brokers offer funded forex accounts through trading challenges. In these challenges, you need to prove your skills by achieving a set profit target or following specific risk management rules within a demo or evaluation account. If you meet these criteria, you can be granted a funded live account to trade with.
2. Profit Sharing:
In exchange for the funded account, you typically share a percentage of any profits you make with the broker. The profit-sharing ratio can vary, but it is commonly around 50%-75% in favor of the trader.
3. Risk Management:
Since you are trading with someone else’s money, these accounts usually come with strict rules on risk management. This can include maximum drawdown limits, trading lot size limits, and other restrictions to prevent excessive losses.
4. Educational and Evaluation Phases:
Many companies require you to go through a learning phase or an evaluation before receiving full access to the funded account. This ensures that only skilled traders get access to the funds.
5. Eligibility and Terms:
These programs may require you to meet certain criteria, such as proving you have a certain level of trading experience or passing an assessment to qualify for a funded account.
Popular Firms Offering Funded Accounts:
Some well-known companies that offer funded forex accounts or trading challenges include:
FTMO
The5ers
MyForexFunds
TopStepFX
Key Points to Remember:
No upfront investment required, but you might still need to pay an evaluation or challenge fee.
Risk management rules are strict to protect the funding firm's capital.
Profits are split between you and the funding company.
