Page background

Funded Trading vs Retail Trading: Which One is Right for You?

In the world of online trading, there are several routes you can take to try and maximise your trading gains. Two such methods are funded…

December 27, 2023
by David X
4 min

In the world of online trading, there are several routes you can take to try and maximise your trading gains. Two such methods are funded trading with prop firms and regular trading with retail forex brokers. Each has unique features, benefits, and drawbacks, making them suitable for different traders. This article aims to provide a comprehensive comparison of these two methods, helping you decide which one might be the best fit for your trading strategy.

What is Funded Trading?

Funded trading is an ever-growing trend in the trading industry. It involves trading with prop firms like FXIFY, where clients pay a fee to undergo a trading evaluation (also known as a trading challenge). Upon passing this evaluation, traders will be given access to the firm’s capital to begin trading on a funded account. Essentially, you’re trading someone else’s money, which can significantly increase your potential gains without increasing your personal risk exposure.

Pros of Funded Trading

  • Limited personal financial risk
  • Access to substantial trading capital
  • Opportunity to gain experience and learn from professionals in the community

Cons of Funded Trading

  • Upfront assessment fees
  • Strict rules and restrictions on trading strategies
  • Limited control over profits and payout schedule

What is Retail Trading?

Retail trading, on the other hand, is the more traditional method of trading. It involves opening an account with a forex broker, depositing your own money, and then using that capital to trade. The profits (or losses) are entirely yours.

Pros of Retail Trading

  • Full control over your trading decisions
  • Keep 100% of your profits
  • No restrictions on trading strategies or risk management

Cons of Retail Trading

  • Requires substantial initial capital to make life-changing gains
  • Full exposure to financial risk
  • Limited access to professional guidance and mentorship

Comparing Funded Trading and Retail Trading

While both funded and retail trading can lead to profitable outcomes, they cater to different types of traders. Funded trading is ideal for those with limited capital but the skills and knowledge to trade effectively. Retail trading, however, is more suitable for those who have the necessary funds and prefer complete control over their trades.

Funded Trading vs Retail Trading: Which Should You Choose?

Funded trading is an excellent option for novice traders who wish to gain experience without risking their own money. It’s also suitable for skilled traders who lack the capital to maximise their trading potential.

Retail trading is ideal for experienced traders who have sufficient capital and want full control over their trading decisions. It’s also a good fit for those who prefer not sharing their profits with a third party.

Risk and Rewards

Both funded trading and retail trading come with their own set of risks and rewards. With funded trading, you risk the evaluation fee, but stand a chance to make profits from a large capital pool. With retail trading, your financial risk is higher, but so is the potential reward, as you keep 100% of your profits.

Making an Informed Decision: Funded Trading or Retail Trading

Choosing between a funded trading account and retail trading depends largely on your financial situation, risk tolerance, and trading skills. If you have limited capital but strong trading skills, funded trading could be your ticket to financial success. However, if you have sufficient funds and prefer to have full control over your trades, regular trading may be the better option. As always, it is crucial to do your research and consider your options carefully before diving in.

Start Your Funded Trading Journey With FXIFY

At FXIFY, we go beyond being just a prop firm – we catalyze your trading success. With over a decade of industry experience and the backing of a reputable broker, we are one of the select few prop firms that can provide unmatched trading conditions to our funded traders. Seize this opportunity with our One Phase, Two Phase, or Three Phase evaluation – pass, and earn up to a 90% Performance Split* as you trade using our firm’s capital. Start with account sizes ranging from $15,000 – $400,000  and scale up to $4M in trading capital. Take the first step towards an extraordinary future – start your trading journey with FXIFY today!

*90% Performance Split/Profit Split offered as an add-on with an additional fee and available upon checkout

Blog categories

Right arrow
Left Grid
We’re bringing the best and brightest traders together.
on Discord