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Funded Trading Scaling Program

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Funded Trading Scaling Program Questions and Answers

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Funded Trading Scaling Program Questions and Answers

What changes have been made to the scaling program?

Update: 24 July 2022

You can now use your profit to fund your next scale up.

Previous Update

Two changes have been made to the original scaling program. The first change was to increase the maximum account size from $1,000,000 to $2,500,000. The second change was to allow the trader to withdraw the profit they make whilst scaling. Previously this profit was swapped for the scale up.

What is Scaling?

Scaling gives traders the opportunity to significantly increase the buying power of their account. This is one way for traders to compound their earnings for future possible gains.

Do all Accounts have to Scale up?

The trader can decide to scale up or to continue building their existing account. It is up to the trader if they wish to scale or not.

Is Scale up Automatic?

No. Traders must raise a support ticket and ask for us to scale up their account. 

When can I scale up?

Traders can increase their account size when their account has a minimum level of profit. On the Experienced Trader and Master Trader Programs this minimum level is 10%. On the Advanced Trader Program this minimum level is 20%.

Are there any other conditions before I can scale up?

Traders must be flat and have no running trades.

What is the maximum scaled account size?

The maximum we are currently prepared to fund traders is $2,500,000.

How long does it take to Scale up?

Please allow up to 72 hours.

Can I withdraw before and after Scaling up?

Yes you can make withdrawals before you scale up. You must however have 10% profit in the account to scale up. 

For example: (1) Trader starts a $100,000 Experienced Trader Program, (2) Trader makes 8% profit (3) they withdraw $3,000 and then they continue to trade (4) making a further $8,000. At this point they decide to scale up to a (5) $200,000 account. After scale up they decide to (6) withdraw $5,000 and then they continue to trade the account.

  1. $100,000 – stating account
  2. $108,000 – drawdown now fixed at $100,000
  3. $108,000 – $3,000 = $105,000 – new balance after withdrawal
  4. $105,000 + $8,000 = $113,000 – new balance
  5. $113,000 + $100,000 = $213,000 – scaled up account with profit, drawdown fixed at $200,000.
  6. $213,000 – $5,000 = $208,000 – new balance after withdrawal.

In this example we are demonstrating how a professional trader may decide to manage their account with withdrawing of profit along the way whilst also being able to scale up.

Why is the drawdown not increased with Account Size?

Funded Trading Plus places funded traders in the real live market. Funded Trading as a business model is about risk management. As traders become profitable the risk on each trader is reduced, however please note, this risk never becomes zero. Doubling our risk at each scale up point is not a viable model and would threaten the business.

If my drawdown is not increased is there any point in scaling up?

This is up to the trader to decide. The greater buying power can be beneficial. A wise trader will not suddenly double their trade sizes just because they have scaled up, they will manage their risk properly and reserve the buying power for special opportunities.

Is there a Daily Drawdown when on the scaling plan?

Daily Drawdown is removed when funded traders reach their profit target (upon request). This stays removed after scaling.

Can I withdraw all my profit?

Yes. Traders can always withdraw all their profit whether they have scaled up or not. Withdrawal of all profit however will often mean that account is then closed because there is no drawdown allowance. Traders who wish to make a career out of funded trading take smaller profits, build their accounts and gradually increase their earnings.

If I’ve scaled once must I continue to scale up?

No. Traders can decide to scale up and continue to scale up as when they decide.

Why can’t I have my cake and eat it?

Our business model has to work for the traders and for us. We place all funded traders in the live market so that money is generated to pay for the successful traders. This is why traders come to us rather than a firm that places them in the demo market. The problem for us is that funded traders do lose money and we have to minimise and cover those losses.

Other firms choose to place limitations e.g. a minimum of 4 months until scaling and other criteria that make it so achieving scaling is near-impossible. We chose to have a scaling plan that is actually achievable. 

Why is your risk not zero if the drawdown is fixed at the account size?

Theoretically when the account drawdown is fixed at the account size our risk with this is zero. However in practice this is not the case. All breaches of live funded accounts are by live trades negatively going through the maximum drawdown point. Our systems then kick in to close those trades. The trades are nearly always closed for a loss and this loss can be quite significant. How much we lose depends on the trade size and the volatility of the markets at the time of closure.

In practice when traders, who are close to their drawdown and see that their trades are going in the wrong direction, they double up in a last minute attempt to save themselves. These final trades can be very costly to us and the only defence we have against this is the maximum margin available to the trader at that time. They load up as much as they can and inevitably the market flys through their max drawdown, and when these trades are closed there is usually significant loss. A scaled up trader has doubled or quadrupled the margin available and our risk has increased proportionally.

I’ve made $50,000 on my $100,000 today. What are my choices, can I have my money and scale up?

Well done. You have different choices.

You can withdraw all $50,000 and close the account.

You can withdraw up to $40,000 and then scale up.

You can scale up and then withdraw some profit.

You can keep trading your $100,000 account (now $150,000) and build it as big as you wish.

Where can I find detail on the scaling programs?

Experienced Trader Program – https://www.fundedtradingplus.com/experienced-trader-program/

Advanced Trader Program – https://www.fundedtradingplus.com/the-advanced-trader-program/

Master Trader Program – https://www.fundedtradingplus.com/master-trader-program/

Context for this Q&A

Discussion on our scaling program on our Discord channel prompted the clarification below on how our scaling program works. This was published Saturday 12 March 2022.

Hey everyone, hoping you’re having a great Saturday.

Let’s talk about scaling, but first let’s give some overall context of the prop firm industry. 

When we started looking at entering this space, it was clear to us the existing prop firm model is this:  

  • Get as many people to pay for demo accounts as possible.  
  • Pay as few people out as possible. 

The greater 1 is than 2, the more profitable the firm. 

This is usually achieved by two things on the CFD side (forget Futures, the pass rate and pay out for Futures prop firms is a fraction of that of CFD firms): 

  • Limited Time to pass (causing pressure and over trading). 
  • Barriers to withdrawal (not being able to withdraw until a certain amount of profit is achieved)
  • Small print / hidden rules to catch people out. 
  • Expensive plans / monthly costs

We didn’t want to be like that. We didn’t want to pressure traders or limit their withdrawals. So we made it so traders can: 

  • Take as long as they want .
  • Could withdraw any profits they make.  
  • Put people in the real market (and not just demo) so the profits are always there and we were not running a pure ‘loser pays for the winners’ model. 
  • No hidden rules to catch people out. 
  • Reasonable pricing compared to other firms

You can promise any scaling model if no one is ever going to achieve it. Let’s take (and I usually don’t talk about other firms) the biggest, FTMO:  

“Capital increments on the FTMO Account take place in four-month cycles. For a capital increase, the trader has to generate at least 10% of net profit (20% in the case of an Aggressive account type) in four consecutive monthly cycles (i.e., the average of at least 2.5% net profit per month in normal account type or 5% net profit per month in an Aggressive account type). At the same time, the trader has to process at least 2 payouts within the 4 months period. It is important that the trader’s account balance needs to be above the initial account balance (in profit) at the time of scale-up.”

The key thing here is a four month cycle i.e. which means no one will ever scale given that and the other criteria that applies. 

Whereas with us, a trader could scale on day one with us. 

How about the second biggest, MyForexFunds (rule 9 from the many rules they have): 

“My Forex Funds offers a competitive scaling up plan so that we grow with you. If you have achieved a profit of 10% or more within a 4 month period and 2 of those 4 months were profitable, we will increase your account size by 30% of the original account size.

At the time of scale up request, trader should be breakeven or positive with the account balance.”

Again, four months which means pretty much no one will get there with only a 30% increase in account size. 

CTI (City Traders Imperium) 5% drawdown 10% target, no withdrawals beforehand, with essentially a 60% profit share and other rules:

“CTI will deduct any profits made by violating the Risk Management Policies.”

It would be nice to know what these “Risk Management Policies” are, but the website does not tell us (and their live chat is offline on a weekend unlike ours, so we can’t ask). Please check the small print, ask all these firms the same questions you ask us. If CTI are taking away 40% of your profit, then that’s paying for their risk in a different way. 

If you scale with us you’re going to be on 80% and then almost immediately on a 90% profit share.  You need to consider the overall rules and package of a firm. Taking one aspect in isolation isn’t the correct way to make an assessment as everything connects together. 

We could create the best scaling plan promises in the world, but if it’s dependent on profit you’ll never withdraw, or a time period you’re highly likely to never reach, then it means nothing because it can never happen. It’s easy to sell a dream of scaling and then put in criteria that means it won’t happen. 

However, when you’re actually creating on that can and does happen, because of the following:

There is no time restriction. It can happen from day 1. Not ‘in four months’.

  • There is a 80/20 and very quickly a 90/10 profit share. Not ‘60%’ 

Then you actually have to consider real-world conditions. 

Those are that funding trading is ultimately about a balance of rules between the firm and the trader. There is no perfect firm who can offer everything because it simply can’t exist, especially when key aspects have no barriers i.e. no minimum time to scale / no barriers to profit withdrawal. Somewhere, somehow firms have to have rules that protect their capital, no company can afford to hand out endless risk. As traders, we built a program that did just that, protected our capital for the longevity of the company but while selecting conditions that we felt most benefited the trader with rules that had the least negative impact on the trader as possible.

Our scaling plan is designed to give people extra buying power, not more risk. The payoff for that is a straightforward method, no timescales, no profitable month hoops. Just a simple profit target, that’s it.

Let’s look at what people would **ideally** like. 

  1. Someone has a 100k account with 10% drawdown. 
  2. They pass the evaluation and go live so we now have $15,000 of risk (we need to put 50% extra for slippage / errors on the live side). 
  3. They make $10,000 and choose to scale to $200,000 
  4. We have a theoretical scaling plan where the account balance starts at $210,000 and drawdown is $180,000. 
  5. We take on $30,000 of risk whilst only taking 20% (and soon to be 10%) of profit if the trader actually withdraws. 

Do the maths. How many traders actually withdrawing would it take to pay for one failure? Keep in mind there will be failures when traders are funded, before scaling, too. 

This would obviously not work and would be impossible to provide without barriers.

We can offer something like that if we put the aforementioned barriers in place. If we put a 4 month minimum. If we put everyone on demo even when ‘live’, but we don’t think that’s the best option at present. 

We have to operate within the statistical and mathematical realities of trading. 

We think our Discord is amazing and the way the growing community is engaging and so passionate about funded trading makes us want to continue to make things better. 

If people have realistic alternatives they’d be happy to undertake, then we’re always open to new ideas and considerations. 

Appreciate this has been a long couple of posts but we’re always happy to take the time, even on a weekend, to talk to you all!  

 

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