The final figure on your payout certificate prop firm sends is the result of a straightforward, but crucial, calculation: the profit split. Understanding this formula is essential, as it translates your trading performance in what is forex into tangible earnings.

The calculation process generally involves three main figures:

1. Gross Profit Determination

First, the firm calculates the Gross Profit (GP). This is the total amount of profit generated in the funded account over the specified performance period (e.g., monthly or bi-weekly). This figure is generally calculated by subtracting the closing balance from the starting balance (plus any deductions for fees or commissions, though commissions are often handled separately).

2. Applying the Profit Split Ratio

Next, the firm applies the pre-agreed-upon profit split ratio. This ratio determines the percentage of the Gross Profit that goes to the trader (T) and the percentage that the firm (F) retains. Common splits range from 70/30 up to 90/10, with the larger share going to the trader.

Using an 80/20 split as an example, where the Trader (T) gets 80% and the Firm (F) gets 20%:

3. Calculating the Net Payout (The Certificate Amount)

The Trader's Share is the amount that will appear as the "Net Payout" on your final payout certificate prop firm provides.

Example Calculation:

• Funded Account Size: $100,000

• Gross Profit in one month: $5,000

• Profit Split: 80% (Trader) / 20% (Firm)

Your payout certificate prop firm would officially certify that your net payout for the period is $4,000.

While the calculation is simple, the certificate’s value lies in its verification that the Gross Profit was achieved without breaching the firm’s strict risk rules—a testament to your disciplined approach to trading what is forex.