Scaling Plan
Evaluation & FundingA program offered by prop firms that increases your account size and/or profit split as you demonstrate consistent profitability over time. Scaling rewards long-term funded traders with larger capital allocations.
Scaling plans are a key retention tool for prop firms. They reward traders who consistently generate profits without breaching rules. The most common scaling mechanism increases account size by 25% after achieving a certain profit milestone.
The5%ers has one of the most aggressive scaling programs, allowing traders to scale from $20K up to $4M. Their profit split also increases from 50% to 100% as you scale. FTMO scales from $100K to $400K and increases the profit split from 80% to 90%.
Scaling typically requires: (1) a minimum number of profitable payout periods, (2) meeting a profit threshold, and (3) no rule violations during the scaling period. Some firms automatically scale you after criteria are met, while others require you to request it.
The5%ers scaling path: start at $20K with 50% split. After 10% profit ($2,000), scale to $40K with 60% split. Continue scaling every 10% milestone: $80K (70%), $160K (80%), $320K (90%), up to $4M (100%). Starting from $20K, it takes 8 scaling milestones to reach $4M. At $4M with 100% split, a 2% monthly return yields $80,000/month -- all yours.
Scaling Plan directly affects whether you pass or fail a prop firm evaluation. Unlike trading your own account where you can recover from mistakes over time, prop firm rules create hard boundaries -- violate them once and you lose your challenge fee and have to start over. Evaluation rules determine the path from paying a challenge fee to receiving funded capital. Getting this wrong means wasted money and time. Many traders cycle through multiple evaluation attempts because they misunderstand these mechanics.
Practical example across firms: FTMO and TopStep handle this differently. FTMO is a 2-step firm with static drawdown and a 5% daily loss limit, starting from €155. TopStep is a 1-step firm with trailing drawdown and a 2% daily loss limit, starting from $49. These structural differences mean your approach to scaling plan must adapt to whichever firm you choose.
Common mistake: Many traders rush through evaluations trying to hit the profit target as fast as possible. This leads to overleveraging and blowing accounts. The firms with no time limit (most of them) give you the freedom to be patient. Use it. A slow, consistent pass rate beats a fast blowup every time.
Funded Account
A trading account provided by a prop firm after passing the evaluation, where the firm supplies the capital and the trader keeps a percentage of profits. The trader does not risk their own money beyond the challenge fee.
Payout Split
The percentage of trading profits that a funded trader keeps versus what the prop firm retains. Typical splits range from 50% to 100%, with most firms starting at 80% and offering increases for consistent performance.
Compound Growth
Growing your position size proportionally as your account balance increases, so profits generate larger future profits. In prop trading, compounding must be balanced against drawdown limits -- increasing size too fast amplifies losses.
Consistency Rule
A rule requiring that no single trading day accounts for more than a certain percentage of total profits. Designed to prevent lucky one-day windfalls from passing evaluations.