PROP FIRMS

(FUNDED ACCOUNTS)

Although the funded capital market is not regulated, we are seeing more and more how these types of companies proliferate and also the types of companies that can give us access to funded capital, which are basically two:

1. Prop firms

Funded accounts are provided by Prop Firms and constitute an association where the trader uses the company's capital to operate in the markets. Some key aspects include:

Characteristics:

• Initial Capital: Prop Firms provide the trader with company capital to operate, eliminating the need for a personal initial deposit.

• Evaluation: Typically, traders must go through an evaluation process before being funded. This may include meeting certain trading objectives with a predetermined level of risk.

• Profit Sharing: There is a percentage of the profits that is shared between the trader and the Prop Firm, encouraging profitable and responsible performance.

• Support and Resources: Many Prop Firms offer training, analysis tools and support to help traders improve their performance.

2. Leveraged Brokers Accounts

Leveraged accounts are offered by brokers and allow traders to trade with volumes greater than their actual capital through the use of financial leverage. A recent example is the ADN broker. In this case, by depositing initial capital, traders can benefit from x10 leverage, thus multiplying their trading capacity. This model gives them the freedom to trade with significantly large amounts, as long as they maintain tight control over risk. In the ADN system, a central rule is that the trader should not have a drawdown greater than 10% of their initial capital. That is to say, although leverage allows you to maximize profit opportunities, it is also essential that the trader limit his losses so as not to exceed the capital he originally deposited. Profits made through this method can be withdrawn at any time, offering an attractive combination of flexibility and profit potential.

Characteristics::

• Enhanced Leverage: Allows you to multiply the trader's operating capital, as in ADN, which offers a leverage of x10 on the initial deposit.

• Risk Management Rules: Despite the high leverage, traders must comply with risk management rules, such as the 10% drawdown limit to minimize the potential for losses.

• Withdrawal Flexibility: Traders can withdraw their profits whenever they wish, offering immediate liquidity and encouraging responsible management of their operations.

• Operating Costs: Although leverage amplifies available capital, there may be associated costs, such as commissions and spreads, that are important to consider.

• Profit Potential and Risk: Leverage increases both profit opportunities and risk of loss, requiring informed trading strategies and strict risk management.

Leveraged accounts from brokers like ADN offer traders the ability to significantly increase their market exposure with a relatively small initial capital. However, it is vital that traders continue to manage their risk carefully to fully benefit from this financial model.

Another similar example is the AXI Select program offered by the well-known and prestigious broker AXI.