So you want to get started trading for a living but don’t have much capital to begin with. One option that is gaining popularity is funded trading – leveraging other people’s money to grow your trading profits over time. In this post, we’ll discuss some funded trading strategies and how you can get started without a huge bankroll.
What is Funded Trading?
Funded trading involves applying for a line of credit from a funding company to trade with. These companies will allocate you a certain amount of capital to trade live with in exchange for a percentage of your profits. There is usually little to no obligation to return the initial capital as long as you keep making profitable trades.
This allows new traders access to significantly more capital than they could fund themselves, letting them scale up their strategies faster. The funding company takes on the risk in hopes your positive performance will earn them profits over time.
Understanding Funding Models
Funding works primarily in two ways:
Revenue Share: The funding firm provides a line of credit for your account in exchange for a percentage (usually 30-50%) of your trading profits each month. You keep the remainder.
Repayment: You are loaned capital interest-free but must return the initial amount plus an agreed margin over time through trading gains. Offers less leverage than revenue share typically.
Most reputable firms now use revenue share as it aligns incentives – they only profit if you do. Both models allow scaling your trading size faster than funding yourself.
Developing a Robust Trading Strategy
Funders will analyze your trading edge closely. Ensure you have:
- A clearly defined strategy utilizing sound risk management principles like position sizing and stop losses. Backtests should prove its validity.
- Rule-based entries and exits to remove emotion. Discretionary strategies are riskier.
- Profitable trading history from paper or funded account practice to evidence your ability to implement the strategy. 6-12 months minimum recommended.
Popular funded strategies include swing trading, day trading, scalping, trend following, and algorithmic/automated approaches. Forex, futures, and stocks are commonly traded markets. By understanding the funding models and developing a solid trading plan, you can increase your chances of success and potentially earn significant profits over time.
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Choosing a Reputable Funding Firm
Research multiple options thoroughly to find a firm that:
- Aligns with your strategy in terms of markets, position sizing rules etc.
- Has a track record of funding successful traders you can reference.
- Offers adequate starting capital for your plan, often $25k minimum. Tiers allow scaling up.
- Contracts fairly, like reasonable profit splits (30-50%) and freedom to withdraw your portion of gains.
- Provides tools like trading platforms, execution, and ongoing support as needed.
- Prominent firms include MyFXFunds, Invstr, FundingSecure, TraderInteractive, and IBFX. Read reviews and compare carefully.
The Application Process
Most firms require:
- A comprehensive strategy description and backtest results.
- Sample trade journal/analysis showcasing your edge.
- Education/experience background and character references if possible.
- Proof of identity/address and funding for compliance.
- Video presentation further clarifies your process.
Follow instructions fully and expect rounds of questions. Present yourself professionally as they invest a lot in you. Acceptance rates average 20-30%.
Popular Funded Trading Strategies
Here are some common strategies traders use when trading with funded capital:
- Swing Trading – Holding positions for a few days to a few weeks, looking for medium-term trends. Works well with larger position sizes enabled by funding.
- Day Trading – Opening and closing trades within the same day, riding intraday moves. Requires discipline but can produce quick results with leverage.
- Scalping – Entering and exiting very short-term trades within minutes based on price action. High risk but can generate steady profits when done well.
- Automated Trading – Using algorithmic or bot strategies to place trades automatically based on defined rules and signals.
The key is finding an edge and strategy you have proven works in backtest and paper trading before trading live with someone else’s money.
Successful funding traders recognize that trading is not just about analyzing charts and executing trades. It also involves managing psychological factors that can significantly impact performance. Here are some key psychological considerations to keep in mind:
- Discipline: Maintaining discipline is crucial in funded trading strategies. Stick to your trading plan, follow your predefined rules, and avoid impulsive decisions based on emotions. Implementing strict risk management protocols and having the discipline to follow them can help you navigate through challenging market conditions.
- Emotion Management: Emotions like fear and greed can cloud judgment and lead to irrational trading decisions. Recognize the emotional impact of wins and losses and develop strategies to manage these emotions effectively. Techniques such as mindfulness, meditation, and visualization can help you stay focused and maintain emotional balance.
- Resilience: Funded trading can be a rollercoaster ride, with ups and downs along the way. Developing resilience is essential to bounce back from losses, learn from mistakes, and stay motivated during challenging periods. Cultivate a growth mindset that embraces failures as learning opportunities and maintains a long-term perspective.
- Confidence: Confidence in your trading strategy and abilities is vital for success. Regularly review your trading performance and remind yourself of your past successes. Additionally, focus on continuous learning and improvement to build competence and strengthen your confidence as a trader.
Proving Yourself As a Funded Trader
Once funded, apply the same discipline as you did in testing but trade smaller position sizes initially to thoroughly prove your strategy works. Focus on consistent profits, not large gains, to earn trust over 6-12 months. Maintain open communication on performance.
As you build a long-term track record of profits, you can apply to lead boards with the company to gain higher tiers of increased funding amounts. Ultimately, deliver sustained success to transition into independent trading with your own capital.
Funded trading strategies can offer life-changing opportunities for wealth creation and income generation. However, it requires following structured strategies tailored for beginner traders. This guide provides a blueprint covering fundamentals like risk management, analysis, psychology, goal-setting, and more. Commit to continuous improvement every day and unlock remarkable wealth creation through funded trading strategies.
To learn more about how WeMasterTrade can help you apply these strategies with their funding and education programs, visit https://wmt.wecopytrade.com/blog
After mastering the basics, WeMasterTrade offers additional opportunities to grow your skills and earnings. Their features include:
- Instant Funding Programs: Traders can get funded instantly up to $2,000,000 without challenges or evaluations. Accounts are doubled whenever a 10% profit is achieved.
- Custom Funding: Choose your trading capital from $10,000 up to $2,000,000. Requests over $200,000 are approved within 48 hours.
- Trading Instruments: Trade stocks, forex, commodities, and more with direct market access and low fees. Over 170 markets are available.
- Education Resources: Leverage free trading courses and daily mentorship from professional traders.
- Performance Tracking: Metrics and reports clearly display your progress over time to enhance skills.
- Community Support: Connect with other traders through an active online forum for Round-the-clock guidance.
- Flexible Withdrawals: Withdraw profits daily without limits as long as targets are met.
- Risk Management: Daily 1% maximum loss limits protect your capital.
By taking advantage of these features, traders can accelerate their potential using WeCopyTrade platform and support.