Glossary
Every prop rule, in one sentence.
20 terms you will meet in evaluation and payout policies, explained without the jargon.
A
- Activation fee
- A one-time fee some firms charge after you pass the evaluation, before the funded account is issued.
B
- Balance-based drawdown
- A loss limit calculated from closed trades only. Open, unrealised losses do not count until the position closes.
- Buffer
- Profit you must keep in the account above the starting balance before you can withdraw.
C
- Consistency rule
- A limit on how much of your total profit can come from a single trading day, usually expressed as a percentage.
D
- Daily loss limit
- The maximum you may lose in one trading day. Breaching it usually fails the account, even if the max loss is intact.
E
- EOD trailing drawdown
- A trailing max loss recalculated from your end-of-day balance, so intraday swings do not move the floor.
- Equity-based drawdown
- A loss limit that counts open, unrealised profit and loss in real time.
- Evaluation
- The challenge phase where you prove you can hit a profit target within the firm's risk rules before receiving a funded account.
I
- Instant funding
- An account that is funded from day one, with no evaluation phase.
- Intraday trailing drawdown
- A trailing max loss that follows your highest open equity in real time, including unrealised profit.
M
- Max loss
- The total amount the account can lose before it is closed. It can be static or trailing.
- Maximum allocation
- The largest combined account size a firm allows one trader to hold.
P
- Payout cap
- The maximum amount you can withdraw in a single payout request.
- Profit split
- The share of funded-account profit that is paid to you.
- Profit target
- The profit you must reach to pass an evaluation phase.
- PT:DD ratio
- Profit target divided by max drawdown. Lower ratios mean less profit is required per dollar of risk buffer.
R
- Reset
- Paying to restart a failed or struggling evaluation at its original balance, usually cheaper than buying a new account.
S
- Scaling plan
- A schedule under which a firm increases your account size or split after consistent performance.
- Static drawdown
- A max loss anchored to the starting balance. It never moves.
T
- Trailing drawdown
- A max loss that rises with your high-water mark until it locks, typically at the starting balance.
