What is simulated account?
A simulated account reproduces market conditions without orders reaching a real market. Most prop firm accounts, including those held after passing the challenge, run on this model.
It is the most misunderstood part of the model, and yet it is written in the terms and conditions of very nearly every firm.
What it means
Your orders are filled against a price feed supplied by the firm or its technology partner, not sent to a market counterparty. The result displayed is a contractual calculation, not the balance of a brokerage account in your name.
This is neither illegal nor necessarily concealed: it follows logically from the model. A company exposing real capital on every candidate in evaluation would be insolvent within months, given the failure rate.
The practical consequences
Three things follow.
Execution depends on internal choices. The spread applied, the latency, how orders are handled during an economic announcement are matters of the firm’s configuration, not of a public order book. Two firms can produce different results from the same strategy.
Payouts come out of the company’s cash. Your gain is not taken from a market counterparty but paid by the company from its own funds. The firm’s financial soundness therefore becomes a parameter of your risk.
Rules can change, since nothing ties them to an external market infrastructure.
Moving to live
Some firms hedge the positions of their most consistent traders on the real market, which aligns their interests with yours: they then earn when you earn.
Others explicitly offer a move to a live account after several payment cycles, often paired with a higher profit split. That step, where it exists, is a quality signal: it means the firm accepts exposing capital to your performance.
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Related terms
- A-book / B-book A-book describes the model where client positions are passed through to the real market; B-book the model where the firm is itself the counterparty and keeps the losses. Most prop firms run predominantly on a B-book.
- Funded account A funded account is the trading account a prop firm allocates once the evaluation is passed. The trader operates under continuing risk rules and keeps a share of the profits, without ever holding the nominal capital.
- Prop firm A prop firm is a company that gives access to a funded trading account after a paid evaluation. The trader deposits no capital: they pay evaluation fees, respect risk rules, and keep a share of the profits generated.
- Slippage Slippage is the gap between the price requested and the price actually obtained on execution. On a prop firm account it depends on the company's infrastructure, and can trigger a drawdown breach.