The phrase “funded account” is widely used in the prop trading world — but not all funded accounts are created equal. Many traders assume that once they pass an evaluation, they’re trading real, live capital in the markets. In truth, not all funded accounts are real in the traditional sense. Some are simulated environments that mimic real market conditions but use virtual funds, while others provide direct access to live brokerage accounts with actual capital.

Why traders assume all funded accounts are real

1. Language used by firms
Terms like “$100,000 funded account” suggest you’re handling actual money placed in a real trading environment. Most firms don’t clarify whether it’s simulated or live.

2. Professional branding
Prop firms often present their platforms, dashboards, and payout structures in a way that looks institutional and legitimate — reinforcing the belief that you’re trading with real capital.

3. Focus on profit share
Since traders receive real payouts, it’s natural to assume that the underlying account is real too. But payouts can still be made from demo environments based on performance models.

Types of funded accounts

1. Simulated (demo) accounts

• You trade in a demo environment that mirrors real prices and spreads.
• The firm uses your performance to determine your payout.
• No actual market exposure exists; trades are not routed to a live broker.
• Common in firms like FTMO and MyForexFunds.

2. Hybrid models

• Initially demo, with the potential to be moved to a live account after proving consistency.
• Some trades may be internally copied to a master account using technology.
• Payouts are still real — the firm simply monetises your strategy indirectly.

3. Live capital accounts

• You’re assigned a real brokerage account with actual firm capital.
• All trades are routed into the live market.
• Risk is tightly monitored, and drawdown limits are strictly enforced.
• More common in institutional or traditional prop firms.

Why many firms use simulated accounts

• Lower operational cost: There’s no risk of real capital loss during evaluation.
• Scalability: Firms can onboard thousands of traders without committing capital to each one.
• Control: They can monitor and assess traders before risking real funds.
• Technology: Performance data can be copied into master live accounts behind the scenes.

Does it matter if the account is demo or live?

Not necessarily — if you’re being paid.
What matters most is:

• Transparency: Are you clear on the type of account you’re using?
• Payout reliability: Does the firm honour profits earned under its model?
• Rule clarity: Are trading conditions fair and rules clearly communicated?
• Scalability: Can you grow your account and income if you perform well?

The quality of your experience and income depends more on the firm’s ethics, infrastructure, and consistency than whether your trades go directly into the market.

Conclusion: Are all funded accounts real?

No — many are simulated, but still professionally structured and fully capable of paying out real profits. The important distinction isn’t between demo and live, but between transparent, reputable firms and those using misleading or unfair practices. Know the model, understand the terms, and focus on consistent performance — that’s what leads to long-term success.

Learn how to navigate real and simulated prop firm accounts confidently with our expert-led Trading Courses designed to help you perform, get paid, and grow in any trading environment.