What is the difference between simulated capital and real capital in a prop firm?
Quick answer
Simulated capital is a virtual balance on an account whose orders are filled by a simulator against live prices; no money is placed in the market. Real capital is money held at a broker or exchange with orders executed in the market. Most challenge-based prop firms use simulated capital for evaluations and often for funded accounts.
Detailed answer
What this means in practice:
- Simulated accounts show realistic profit and loss using live prices, but the balance is a number in the firm's system.
- Payouts from simulated funded accounts are paid from the firm's revenue.
- Real-capital accounts expose the firm to market gains and losses and require a broker relationship.
Clear disclosure is important. Traders should understand from your terms that accounts are simulated and how payouts are calculated. Regulators in several countries have focused on how firms describe this.
PropExecutor is a simulator by design: it fills orders against live prices from a cTrader feed with raw spreads and never sends an order to a real market.
How to describe it
A clear sentence works: "Your account is a simulated account using live market prices; payouts are calculated from your results and paid by the firm." Plain wording avoids misunderstandings and the regulatory attention that misleading descriptions attract.
Hybrid firms
If you mirror selected traders into real markets, say so accurately without implying every account is real.
PropExecutor team · Updated
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