FTMO, FundedNext, and Funding Pips are three of the most recognized proprietary trading firms, each offering a funded account after passing an evaluation. The core difference lies in their specific rules: profit targets, drawdown limits, trading periods, and payout structures. This comparison breaks down those rules to help you decide which firm aligns with your trading style and risk tolerance.
FTMO: The Industry Standard
FTMO has set the benchmark for prop firms since its founding. Its evaluation process is a two-step challenge followed by a verification phase. The profit target for the first step is 10%, and the second step requires 5%. The maximum daily drawdown is 5% of the account balance, and the maximum total drawdown is 10% of the initial balance. FTMO offers a flexible trading period of 30 days per step, with no minimum trading days required. Once funded, traders receive up to 80% of the profits, with a scaling plan that can increase this to 90%. FTMO is known for its transparent rules and reliable payouts, making it a safe choice for traders who value clarity and a proven track record.
Verdict: FTMO is the safest choice for traders who value clarity and a proven track record.
FundedNext: The Flexible Alternative
FundedNext differentiates itself with two main evaluation models: the Stellar Challenge and the Evaluation. The Stellar Challenge is a one-step evaluation with a 10% profit target and no time limit, but it has a maximum daily drawdown of 3% and a maximum total drawdown of 6%. The Evaluation is a two-step process similar to FTMO, with a 10% profit target for step one and 5% for step two, but with a more generous 5% daily drawdown and 10% total drawdown. FundedNext also offers a profit split of up to 90% on its Stellar models, and it provides a simulated trading environment for its funded accounts. The firm is known for its flexible rules, including the option to trade news and use expert advisors. This flexibility makes FundedNext appealing to traders who prefer a one-step challenge with a higher profit split.
Verdict: FundedNext appeals to traders who prefer a one-step challenge with a higher profit split.
Funding Pips: The Trader-Friendly Option
Funding Pips is a relatively newer firm that has gained popularity for its trader-friendly rules. Its evaluation is a two-step process with a 8% profit target for the first step and 5% for the second. The maximum daily drawdown is 5%, and the maximum total drawdown is 10%. Funding Pips has no time limit on either step, allowing traders to trade at their own pace. The firm offers a profit split of up to 80% on its funded accounts. Funding Pips is also known for its low cost of entry and its support for various trading styles, including news trading and hedging. This makes Funding Pips ideal for traders who want no time pressure and a low initial cost.
Verdict: Funding Pips is ideal for traders who want no time pressure and a low initial cost.
Comparison Table: Key Rules at a Glance
| Criteria | FTMO | FundedNext | Funding Pips |
|---|---|---|---|
| Evaluation Steps | 2-step (Challenge + Verification) | 1-step or 2-step (Stellar or Evaluation) | 2-step |
| Profit Target (Step 1) | 10% | 10% (Stellar) or 10% (Evaluation) | 8% |
| Profit Target (Step 2) | 5% | N/A (1-step) or 5% (2-step) | 5% |
| Max Daily Drawdown | 5% | 3% (Stellar) or 5% (Evaluation) | 5% |
| Max Total Drawdown | 10% | 6% (Stellar) or 10% (Evaluation) | 10% |
| Time Limit (per step) | 30 days | No limit (Stellar) or 30 days (Evaluation) | No limit |
| Profit Split (max) | 80% (up to 90% with scaling) | 90% (Stellar) or 80% (Evaluation) | 80% |
| Minimum Trading Days | None | None | None |
| News Trading Allowed | Yes | Yes | Yes |
| Expert Advisors Allowed | Yes | Yes | Yes |
| Account Types | Standard, Swing | Standard, Swing, Stellar | Standard, Swing |
| Platforms Supported | MT4, MT5, cTrader | MT4, MT5, cTrader | MT4, MT5 |
How to Choose Between Them
Choosing the right prop firm depends on your trading style, risk tolerance, and goals. If you prefer a well-established firm with clear rules and a track record of payouts, FTMO is a solid choice. Its two-step process is straightforward, and the 30-day time limit per step keeps you focused. The 5% daily drawdown cap is generous compared to some other firms, giving you room to recover from a losing day.
If you are a trader who likes flexibility and the possibility of a higher profit split, FundedNext may be more appealing. The Stellar Challenge allows you to skip the second step and get funded faster, but it comes with a tighter drawdown limit. You need to be disciplined with your risk management to succeed under those conditions. The Evaluation model offers a more traditional structure if you prefer a two-step process.
If you want no time pressure and a low initial cost, Funding Pips is worth considering. The lack of a time limit means you can trade at your own pace, which is ideal for part-time traders or those who prefer to wait for high-probability setups. The 8% profit target on the first step is slightly lower than the other firms, making it a bit easier to reach.
When comparing these firms, consider how the drawdown is calculated. FTMO and Funding Pips use a daily drawdown based on the account balance at the start of the day, while FundedNext's Stellar model uses a lower total drawdown. This affects how much risk you can take on any given trade. A trader who uses a high-risk strategy may find FundedNext's Stellar model too restrictive, while a more conservative trader may appreciate the lower drawdown limit as a safeguard.
Another factor is the profit split. FundedNext offers up to 90% on its Stellar model, which is the highest among the three. However, this may come with stricter rules or a higher fee. FTMO's scaling plan allows you to increase your profit split over time, which can be a long-term benefit. Funding Pips offers a flat 80% split, which is competitive but not the highest.
Finally, consider the trading platforms each firm supports. FTMO and FundedNext support cTrader, which is popular among traders who use advanced charting and analysis tools. Funding Pips only supports MT4 and MT5, which may be a limitation if you prefer cTrader. For traders who use AI-powered analysis tools, cTrader integration can be a significant advantage, as it allows for more sophisticated order management and analysis.
Frequently Asked Questions
What is the difference between a one-step and a two-step evaluation?
A one-step evaluation requires you to reach a single profit target without breaching the drawdown limits. Once you hit the target, you are funded. A two-step evaluation involves a first step with a higher profit target, followed by a second step with a lower target, usually with a smaller drawdown limit. The two-step process is designed to confirm your consistency before you receive a funded account.
Can I trade news events with these prop firms?
Yes, all three firms allow news trading. However, you should check the specific rules for each firm, as some may have restrictions on holding positions over news releases or may require you to close trades before high-impact events. FTMO, FundedNext, and Funding Pips all permit news trading, but it is always wise to read the terms and conditions carefully.
How is the daily drawdown calculated?
The daily drawdown is typically calculated based on the account balance at the start of the trading day (midnight server time). If your account balance drops by more than the allowed percentage from that starting balance, you breach the rule. For example, if your starting balance is $100,000 and the daily drawdown is 5%, your equity cannot fall below $95,000 at any point during that day.
What happens if I breach a drawdown limit?
If you breach a drawdown limit during the evaluation, your evaluation is failed, and you lose the fee you paid. Some firms may offer a reset option for a fee. If you breach a drawdown limit while funded, you may lose your funded account, but some firms may allow you to re-enter the evaluation process. It is important to understand the specific consequences for each firm before you start.
Are there any hidden fees with these prop firms?
All three firms charge an evaluation fee, which is typically refunded after you pass the evaluation and receive your first payout. There are no recurring monthly fees for funded accounts, but you may incur costs for platform data feeds or additional services. Always read the terms and conditions to understand any potential fees.
In summary, the choice between FTMO, FundedNext, and Funding Pips depends on your trading style and preferences. FTMO offers a reliable, transparent process with a strong reputation. FundedNext provides flexibility and a higher profit split on its one-step model. Funding Pips offers no time pressure and a lower profit target, making it accessible for many traders. By understanding the evaluation rules and how they align with your trading approach, you can select the prop firm that gives you the best chance of success.
Disclaimer: This article is for educational purposes only and does not constitute financial advice. Trading involves risk, and you should only trade with money you can afford to lose.
