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You trade with a firm’s capital instead of your own. Your maximum loss is the test fee. So how does funded trading work? Here’s the full breakdown for crypto leverage traders.
Every time you deposit money on an exchange and open a leveraged position, you’re putting your own capital at risk. You know this. You’ve probably deposited, gotten liquidated, and deposited again more times than you’d like to count.
There’s a different model.
With funded trading, a company gives you an account with their capital. Breakout, for example, gives traders accounts from $5,000 to $200,000. You trade it the same way you trade on a CEX, using leverage on crypto. The difference: the money in the account isn’t yours. If you lose, you lose access to the account. You don’t lose your savings, you don’t owe a margin call, and you don’t need to deposit again.
The most you can lose is the fee you paid to take the trading test. That number is fixed before you start.
How Funded Trading Works: Step by Step
You pay a test fee and trade a test account. Pick an account size. A $100,000 account at Breakout starts at $330. You trade the test account the same way you’d trade on an exchange: open positions, use leverage, manage risk. The target is to hit a profit goal while staying within loss limits. No time limit. No minimum number of trading days. You can pass in one trade if the setup is there.
Pass the test, get the firm’s capital. Hit the profit target without breaching the loss limit, and the account upgrades to a funded account backed by the firm’s money. $100,000 of Breakout’s capital, accessible to you, tradable with leverage.
Trade profitably, keep 80% of the profits. At Breakout, the default split is 80%, with 90% available as a paid upgrade. Withdraw whenever you want, 24/7. There’s no approval queue, no payout cycle, no minimum trading days before you’re eligible to withdraw.
How This Compares to Trading on a CEX
The structural differences matter more than they look on paper.
The deposit cycle. On a CEX, the pattern goes: deposit $1,000, trade with leverage, hit a bad stretch, get liquidated, deposit another $1,000. Repeat. If you’ve done this three times this year, you’ve spent $3,000 to trade a $1,000 account. With funded trading, you spend $330 once. If you blow the account, another $330 buys a new test, and passing it puts you back at a full $100,000 balance. The math on cumulative cost usually favors funded trading heavily, sometimes by the second or third cycle.
Run the numbers yourself. Open your exchange deposit history. Add up every deposit you’ve made this year. Subtract any withdrawals. That net number is what you’ve paid to trade your own account. Compare it to two or three test fees at $330 each. Most leverage traders who do this math are surprised by the total.
Leverage and position sizing. On your $1,000 account, you’re probably using 20x or more. Not because you want to, but because 2x on a $1,000 account produces meaningless P&L. $20 on a winning trade isn’t worth the screen time. So you crank the leverage, which puts you closer to liquidation on every position, which feeds back into the deposit cycle.
This is the part that standard trading advice ignores. “Just use less leverage” assumes you have enough capital for low leverage to produce meaningful results. If you have $1,000, it doesn’t. The advice is correct in principle and impossible in practice at that account size.
On a $100,000 funded account, you can use 5x on BTC and the math works. 1% risk per trade is $1,000, which with a 2% stop supports a $50,000 position. At that size, standard risk management stops being theoretical. You stop overleveraging because you don’t need to.
The downside structure. On a CEX with cross margin, your downside is your entire deposit. On isolated margin, it’s the margin allocated to the position, but you’re still losing your own money. On a funded account, your downside on the entire venture is the test fee. The firm absorbs the trading losses because it’s their capital.
There’s no margin call and no debt. Your liability ends at the fee. If the market gaps against you overnight and your position gets liquidated for a loss larger than you expected, that’s the firm’s problem, not yours. On your own account, that gap comes directly out of your savings.
The Fresh Start Mechanic
This is where the math really diverges from trading your own capital.
On a personal account, if you’re down 30%, you need a 43% return just to get back to even. The deeper the hole, the worse the math gets. A 50% loss requires a 100% gain to recover. Traders who’ve been through deep drawdowns know how demoralizing that recovery grind is.
On a funded account, if you breach the loss limit, the account closes. You pay a new test fee, pass the test again, and start at full balance. There’s no recovery math and no hole to grind out of.
A $330 test for a fresh $100,000 account versus needing a 43% return on a depleted personal account just to break even. The numbers aren’t close.
What You Can Trade and How
Funded accounts for crypto work the same way your CEX account works in terms of available markets. You’re trading BTC, ETH, and altcoins with leverage. The main differences are on the rules side.
Most funded trading firms set two rules: a maximum daily loss and a maximum total loss (how far the account can drop before it closes). Stay within those limits and trade however you want. Scalp, swing trade, hold through news. Use the leverage available. Size aggressively or conservatively. The trading approach is your call.
Some firms add restrictions on top of those loss limits: consistency rules that penalize uneven P&L, profit caps that limit your upside, minimum trading days that force activity, or news trading bans. These exist to protect the firm’s economics, not to manage risk. If you’re evaluating firms, look at the full rule set. The simplest ones just enforce the loss limits and get out of your way.
What It Costs
Test fees scale with account size:
A $5,000 account costs under $50 to attempt. A $50,000 account is in the $180 to $400 range. A $100,000 account starts at $330. A $200,000 account runs $660 to $1,090.
That fee is non-refundable whether you pass or not. It’s the cost of access to the test, and it’s the maximum you can lose on the entire attempt. On Breakout’s site the test fee appears as the evaluation fee, the industry’s name for the same thing.
The deposit-history exercise from earlier applies here: put your net deposits for the year next to two or three test fees and see which number is bigger.
Can You Trust This?
The funded trading industry has a trust problem. Firms with no backing, no track record, and no transparency have burned traders. That’s worth acknowledging upfront.
What separates the legitimate firms: institutional backing you can verify, payout history you can check, and rules you can read in full before you commit.
Breakout is backed by Kraken, and the relationship is public and easy to verify. Breakout has paid over $50M to traders since launch, publishes a public leaderboard, and has been operating since November 2023. Two loss limits, no consistency rules, no profit caps. You can read the full rule set before you buy.
You don’t have to take anyone’s word for it. Check the public leaderboard. Check the #payouts channel in Discord. The data is there for anyone who wants to verify.
Who This Is For
If you’re actively trading crypto with leverage on a CEX, you already have the skills funded trading requires. You understand entries, exits, risk management, leverage mechanics, and liquidation risk. For a lot of traders in that position, the missing piece is capital, not skill.
Funded trading doesn’t teach you how to trade. It gives you an account where your existing skills have room to operate at meaningful size. If your $1,000 account has been forcing you into 20x leverage on altcoins when you’d rather be trading BTC at 5x on a 4-hour timeframe, a funded account removes that constraint.
The test fee is the barrier to entry, not your bank balance.
The mechanics are simple. Pay a fee. Prove you can trade. Trade the firm’s capital. Keep most of the profits. The maximum you can lose is the fee.
