Your "funded account" is probably fake. Most prop firms use demo accounts with fictitious capital, not real money. Even FTMO admits: "demo account with fictitious funds."
The Truth: Challenge fees fund payouts, NOT trading profits. Firms use simulators to avoid market risk while collecting billions in fees.
This investigation exposes the technical differences, which firms lie about real capital, and how to identify if your account is simulated.
95% of prop firm "funded accounts" are just demo simulators with fictitious capital. FTMO admits it openly. Complete technical investigation reveals which firms lie and how to identify fake accounts.
According to Spotware and multiple industry sources, the overwhelming majority of prop firms rely on demo accounts because "using real money for all funded traders would expose them to unsustainable risk."
FTMO, one of the largest prop firms, doesn't hide it. On their own website, they openly admit the truth about funded accounts:
FTMO Official Statement:
"Upon completing evaluation, FTMO Traders trade on a demo account with fictitious funds, but can be rewarded for their performance with up to 90% of the simulated profits they generate."
Read that again: "demo account with fictitious funds."
This means:
FTMO is honest about it. Most other firms hide this fact and market themselves as providing "real capital" or "live funded accounts" when they're actually doing the exact same thing.
Industry research shows prop firms use three primary models for funded accounts:
How it works: All accounts - evaluation AND funded - are demo accounts. No trades ever hit the real market.
Firms using this: FTMO (admitted), and likely 90%+ of all prop firms
Revenue source: 100% from challenge fees. Payouts come from fees collected from failing traders.
Reality: Your "trading profits" are completely simulated. Firm has zero market exposure. This is why payout denials are so easy - no actual money was ever made.
How it works: You trade on demo, but firm claims to "mirror" or "copy" winning trades to a real account.
Firms claiming this: Various firms market "copy trading" or "trade mirroring"
The problem: "There is often no way to validate that's actually taking place, making it hard to know if they are really doing it."
Reality: Impossible to verify. Many firms claim copy trading but provide zero proof. Likely just demo accounts with marketing hype.
How it works: Funded traders actually trade with real capital in live markets.
Firms using this: Axi Select, TopStep (Big Leagues only), possibly FunderPro & BullRush
Why it's rare: As stated by research, "this model is risky, given that so many funded traders end up blowing up their accounts, and a prop firm that gives these people a live account has to wear that loss."
Reality: Real capital, real risk. These firms are few and far between. Often require proven track record or higher barrier to entry.
According to MQL5 community and technical analysis, there are measurable differences between demo and live accounts that you can test yourself:
Simple Test:
During major news events (NFP, FOMC), try placing trades. Demo accounts execute instantly with tight spreads.Live accounts show massive spread widening, requotes, and delays. If your "funded account" acts like a demo during news, it IS a demo.
You don't have to take the firm's word for it. There are specific, verifiable tests you can run to determine whether your "funded account" is using real capital or simulated funds:
In MT4/MT5, look at your login credentials. The server name reveals everything:
Demo Account: Server name contains "-Demo" (e.g., "FirmName-Demo", "FirmName-Demo01")
Live Account: Server name contains "-Live" or "-Real" (e.g., "FirmName-Live", "FirmName-Real01")
If your funded account shows "-Demo" in the server name, you're trading on a simulator.
During major news events (NFP, FOMC, CPI), place small test trades and monitor behavior:
If your account executes flawlessly during NFP while the rest of the market is experiencing chaos, you're on a demo simulator.
Track the EUR/USD spread over several days, especially during London open and major news:
Demo Behavior: Static spreads (always 0.8-1.0 pips), never widens during news
Live Behavior: Dynamic spreads (0.6-3+ pips), widens to 10-30 pips during major news
Demo accounts use artificial, static spreads because there's no real liquidity provider. Live accounts reflect true market conditions with variable spreads.
Check the firm's terms and conditions, FAQ, and website for revealing language:
Honest firms like FTMO disclose it openly. Dishonest firms use vague language or omit it entirely.
Email customer support with this exact question:
"Do funded traders trade with real capital deployed to live markets, or are funded accounts using simulated/demo funds?"
Honest answer (rare): "We use simulated capital for funded accounts."
Evasive answer (common): "We use a proprietary model," "Trade execution varies," or ignoring the question entirely = Demo accounts
Bottom Line:
If your funded account has instant execution, static spreads, "-Demo" server name, and the firm uses vague language about capital deployment, you're trading on a simulator. Period.
Industry research shows only a handful of firms actually deploy real capital for funded traders. Here's the complete verified list:
Important:
Even these firms require independent verification. Claims change, business models evolve, and marketing doesn't always match reality. Always test execution and ask direct questions.
Axi (formerly AxiTrader), a regulated broker operating since 2007, uses real capital for funded traders. Multiple sources confirm genuine live accounts.
TopStep offers up to $150,000 in real capital for proven traders in their "Big Leagues" program. However, most funded accounts start on simulators until you qualify for real money.
Maverick Currencies deploys real capital for funded traders, according to industry research.
FunderPro markets itself as using real capital but provides limited proof. Test execution yourself.
BullRush claims to use real capital but community verification is limited. Proceed with caution.
The following major firms have confirmed they use demo/simulated accounts for funded traders:
If a firm isn't on the "Verified Real Capital" list above, assume demo until proven otherwise.
Reality Check:
Out of 300+ prop firms operating worldwide, fewer than 5 firms have confirmed real capital deployment. That's less than 2% of the industry. The rest? Simulators.
It's not a conspiracy. It's simple business math. Using demo accounts instead of real capital makes perfect economic sense for prop firms - but terrible sense for traders who think they're trading real money.
According to research, 80%+ of funded traders blow up their accounts within weeks or months.
Real capital scenario: If a firm funds 1,000 traders with $100k each, that's $100 million in capital at risk. When 80% blow up, the firm loses tens of millions.
Demo scenario: Zero capital at risk. All 1,000 traders can blow up and the firm loses nothing. Only payouts come from the challenge fee pool.
With demo accounts, firms keep 100% of challenge fees as pure profit:
With real capital, firms would need to share actual trading profits with traders. With demo, there are no real profits to share - just fee redistribution.
Demo accounts are infinitely scalable. Real capital is not.
Real Capital Limits:
Demo Advantages:
With simulated accounts, payouts are discretionary, not contractually obligated:
Because no real money was made in markets, firms can justify denying payouts for virtually any reason:
With real capital and actual market profits, payout denials would face legal scrutiny. With simulators? The firm controls everything.
The Bottom Line:
Demo accounts give firms zero risk, maximum profit, infinite scalability, and complete control.Why would they ever use real capital when simulators are more profitable?
Some firms try to have it both ways: "You trade on a demo account, but we mirror your winning trades to a live account with real capital." Sounds reasonable, right?
It's likely a lie. Here's why:
The industry reality:
"There is often no way to validate that's actually taking place, making it hard to know if they are really doing it."
Firms provide zero transparency: no live account statements, no trade confirmations, no broker integration proof. You're expected to trust their word.
Demo execution ≠ Live execution. Here's the technical reality:
The technical challenges make true "mirroring" nearly impossible. More likely: they selectively copy trades (if at all).
Why would a firm actually copy trades to live accounts when they can:
✓ Keep 100% of challenge fees
✓ Avoid all market risk
✓ Control payout denials completely
✓ Scale infinitely without capital requirements
Copying trades to live markets reduces profit and increases risk. There's zero financial incentive to actually do it.
Even if firms copy some trades, they're selective:
You're told your demo P&L determines payouts. But if they're selectively copying (or not copying at all), the demo P&L is meaningless.
How to Test Copy-Trading Claims:
1. Ask for proof: Request live account statements showing mirrored trades
2. Compare execution: If your demo trade fills instantly but they claim to copy live, demand to see live fill confirmations
3. Test during news: Place demo trades during NFP. If firm claims to copy but provides no proof of live fills with slippage, they're lying
Bottom line: Copy-trading claims are marketing hype unless proven otherwise. Without transparency and verifiable proof, assume demo-only until demonstrated conclusively.
If 95% of funded accounts are simulators with no real market exposure, where do payouts come from?
Not from trading profits. From the pool of forfeited challenge fees.
Challenge fees are forfeited immediately. This creates the payout pool.
Example: 10,000 traders × $300 fee = $3,000,000 collected. 8,000 fail = $2,400,000 forfeited fees.
These 2,000 traders receive demo accounts with fictitious capital. Zero cost to the firm.
(Firm keeps their $300 fees too: another $600,000)
Of the 2,000 funded traders, 1,600 violate rules or fail. Zero payout required (demo accounts).
Of 10,000 original traders, maybe 30-50 receive payouts. Funded entirely from the fee pool.
Math: 50 traders × $2,000 average payout = $100,000 total payouts.
Firm keeps: $3,000,000 - $100,000 = $2,900,000 profit
Key Insight:
Because accounts are simulated, no real market profits exist. The $2,000 "profit" you made on your demo account didn't generate $2,000 in actual trading gains. It's a simulated number.
Your payout comes from other traders' failed challenge fees, not from market returns.
With 80%+ failure rate, fee income always exceeds payouts. Mathematical certainty.
No capital deployed = no market exposure. Firm profits regardless of market conditions.
Can fund unlimited traders instantly. More traders = more fees = more profit.
Discretion to deny payouts for any reason. Keeps more fees in the profit pool.
The Uncomfortable Truth:
This isn't technically a scam - firms disclose it (sometimes). But it's fundamentally misleading. Traders believe they're trading real capital and generating real profits. In reality, they're playing a simulator where payouts come from a fee redistribution pool, not market performance.
Email: "Do funded accounts use real capital or simulated funds?" Evasive answer = demo.
Test execution, spreads, server names. Demo behavior = simulated account.
Look for "simulated," "fictitious," or "demo" in terms. Honest firms disclose it.
Research community feedback, ask other traders, look for verified proof of real capital.