Instant funded accounts have revolutionised the trading industry. Once reserved for hedge funds and institutional traders, funded accounts are now available to experienced retail traders. But what exactly are the benefits of trading with an instant funded account? And are there any cons that traders aren’t discussing? Let’s take a closer look:
Pros of Trading With an Instant Funded Account
Here are three benefits of trading with an instant funded account you should know.
No Challenge or Evaluation Phase
Most traditional prop firms require traders to pass an evaluation challenge before they can access funding. During the evaluation phase, traders must comply with strict drawdown limits and meet specific profit targets. As an experienced trader, jumping through such hoops can feel unnecessary and time-consuming. An instant prop firm doesn’t impose such requirements. You can skip delays and start trading instantly.
Access to Capital
Every trader faces one unavoidable hurdle: A lack of funding capital. An instant funded account can solve this problem. Reputable instant prop firms, such as Maven Trading, can fund your account up to $100,000, depending on your experience and trading strategy.
Once your account is funded, you can trade a range of instruments, including currency pairs, commodities, indices, cryptocurrencies, and more. Trading platforms include MetaTrader 5 or cTrader.
Scalability
One of the biggest advantages of trading with an instant prop account is the room for scaling. Many firms increase your capital once you hit predetermined profit targets. Once the scaling criteria are met, you can also expect a higher profit split.
Cons of Instant Funded Accounts
Unfortunately, trading with an instant funded account comes with its fair share of disadvantages. Here’s a closer look at those.
Expensive Upfront Cost
Instant funded accounts cost more than traditional prop accounts that come with an evaluation challenge. That said, many instant prop firms refund your fee if you fail to make a profit. This comes as a relief for traders who can’t afford to lose their hard-earned money.
Lower Profit Split
With a traditional 1-step or 2-step funded account, you can expect a profit split of 80/20 or even 90/10. This isn’t the case with instant funded accounts.
Look at it this way: The prop firm is taking a greater risk to fund your account, which is why they follow a low profit-split model. With most firms, you get to keep 70% of the total profit made. However, by meeting profit targets, you can scale up and get a higher profit percentage.
Strict Trading Rules
Instant prop firms often impose limited risk flexibility. You need to use risk management tools and strategies like stop-loss or take-profit orders. In most cases, you can’t lose more than 10% of your total account size.
Conclusion
After learning the pros and cons of instant prop trading, you might be wondering: Is it worth it?
The answer depends on your trading style and goals. If you want to enter the market immediately, an instant funded account is an excellent option. It allows you to skip unnecessary evaluation phases, allowing you to start your trading journey.
