Highlights
- Trading your own money means you control the account and keep all profits, but you are also fully responsible for every loss.
- Trading with a Topstep Funded Account® lets you trade firm capital, follow defined risk rules, and earn payouts based on performance.
- Brokerage trading emphasizes independence and long-term capital management, while prop firm trading emphasizes structure and consistency.
- Topstep® offers multiple paths to funding, including the Trading Combine® and the Express Funded Account.
- Understanding how risk, rules, and payouts differ helps traders choose the approach that fits their goals and experience level.
If you’re learning how trading works, one of the first, and most important, things to understand is who is putting up the money.
Most trading paths fall into one of two categories:
- Trading through a brokerage account, where you trade your own money
- Trading through a prop firm, where you trade the firm’s money
Both are legitimate ways to trade. The difference is how risk, responsibility, and payouts work.
This guide explains the difference so you can understand how each model works and decide which approach fits where you are in your trading journey.
Brokerage trading: trading with your own money
When you trade through a brokerage, you open an account with a broker and deposit your own funds. Every trade you place uses your money, and every result shows up directly in your account balance.
With brokerage trading:
- You provide the money
- You control the account
- You keep 100% of the profits
- You are responsible for 100% of the losses
Because gains and losses directly affect your account, brokerage trading offers full ownership and independence. You decide how much to trade, how much to risk, and how you manage your account over time.
Many traders value that control, but it’s also important to know that losses can happen quickly and may exceed your initial deposit, so brokerage trading may not be the right fit for every trader. That’s why some traders look to prop firm trading as an alternative way to access the markets.
Prop firm trading: trading with our money
Prop firm trading approaches the same markets from a different angle.
In a prop firm like Topstep, you do not start by trading your own money. Instead, you pay a fee for the opportunity to earn access to firm funding. That funding allows you to trade with the firm’s money and earn a share of the profits you generate. The firm sets risk limits and trading rules, and you trade within that structure.
At Topstep, this process starts with a simulated evaluation called the Trading Combine. It uses real market data and live price movement, but applies clear rules designed to measure consistency and risk management over time. Once you pass the Trading Combine, you earn an Express Funded Account. You’re still trading in simulated markets, but now you trade our money and work toward real payouts.
After showing long-term consistency, you earn access to a Live Funded Account, where trades are placed in live markets using Topstep’s money and payouts are based on performance.
How risk and payouts work in brokerage and prop firm trading
This is where the difference between trading your own money and trading a firm's money becomes most clear.
With brokerage trading, gains and losses stay entirely in your account. You manage both sides of the outcome directly.
With prop firm trading, trades in a Funded Account are placed in real markets, but the money belongs to the firm. You’re not depositing funds into the account. You’re trading the firm’s money under agreed-upon rules.
Payouts are based on performance. At Topstep, traders keep up to 90% of their profits, while the firm absorbs trading losses. That structure shifts the focus from protecting personal capital to executing consistently within defined risk limits.
Choosing between brokerage and prop firm trading
Neither brokerage trading nor prop firm trading is better than the other.
- Brokerage trading emphasizes full control and ownership
- Prop firm trading emphasizes structure and performance-based payouts
Some traders prefer one approach. Others use both at different stages of their trading journey.
What matters most is understanding how each works, so you can choose the path that aligns with your goals, experience level, and risk approach.
How Topstep supports traders through Funded Accounts
Topstep is built to offer a clear, structured way to trade firm money.
Through the Trading Combine, traders demonstrate consistency in a simulated environment before earning access to funded accounts. Strong performance can unlock:
- Real payouts
- Access to more trading money (up to $150K+)
- Over $250K in cash bonuses
- Coaching, tools, and a supportive trader community
This structure is designed to help traders learn, trade, and earn while trading Topstep’s money instead of their personal savings.
How you trade ultimately comes down to what fits your goals and experience level. The right choice depends on how you want to trade and where you are on your journey.
Choose the path that fits, and start your path to funding today.
Frequently asked questions
How do prop firm accounts work?
Prop firm accounts allow traders to trade a firm’s money instead of their own. After qualifying through an evaluation or direct funding option, traders place trades under defined risk rules and earn a percentage of the profits they generate, while the firm provides the trading capital.
What is the funded account challenge and evaluation process?
The funded account challenge, often called an evaluation, is designed to measure consistency and risk management. Traders must meet profit targets while respecting drawdown and risk limits before earning access to a funded account that uses the firm’s money.
Are funded trader programs legit?
Funded trader programs are legitimate when they clearly outline rules, risk limits, and payout structures. Reputable prop firms operate transparently, pay real profits, and place traders in live markets once funding requirements are met.
What are the costs and fees for funded accounts?
Funded accounts typically involve an upfront fee to access an evaluation or direct funding option. This fee covers the opportunity to trade firm capital, platform access, and support, rather than acting as a trading deposit.
How do you get a prop firm funded account?
Traders can get a prop firm funded account by either passing an evaluation process or choosing a direct funding option, depending on the firm. Both paths require following specific rules and demonstrating disciplined trading behavior.
What are funded account profit split rules?
Funded account profit split rules determine how profits are shared between the trader and the firm. Topstep allows traders to keep a high percentage of profits, while the firm absorbs trading losses and provides the capital.
What type of funded account is right for my trading style?
The right funded account depends on your experience level, risk tolerance, and preference for structure. Some traders prefer a gradual evaluation process, while others prefer faster access to funding with clearly defined risk limits.
