Prop Trading Dictionary

A company that offers traders access to a funded or simulated trading account under a published rule set, usually after a paid evaluation. The trader risks the evaluation fee; the firm sets the rules, account mechanics, and payout terms.

An evaluation process where a trader must meet profit and risk rules before becoming eligible for a funded account or payout stage. Also sold as “evaluation,” “audition,” or “combine” depending on the firm.

The account used to test whether a trader can meet the firm’s published objectives and risk limits. Rules in the evaluation stage often differ from the funded stage — read both rule sets before buying.

One stage within a challenge. Multi-phase evaluations usually reduce the profit target in later phases; single-phase products skip straight from one test to the funded stage. Phase counts, targets, and time limits vary by firm and product.

Shorthand for how many evaluation phases sit between purchase and the funded stage. One-step products usually trade a single tougher phase against two easier ones; drawdown style and payout terms often differ between the two formats at the same firm.

The profit a trader must reach in an evaluation phase before advancing, usually expressed as a percentage of starting balance or a fixed dollar amount. Some funded stages also carry targets that gate scaling or payouts.

An account stage marketed as funded or payout-eligible after a trader passes required evaluation steps. “Funded” does not always mean live capital — see live vs simulated funding.

A funded-style account that may use simulated execution while applying payout and risk rules set by the firm. Common in futures prop trading; the firm pays traders from its own funds based on simulated performance.

Whether funded-stage trades route to a real market or stay in a simulated environment. Many firms run some or all funded accounts simulated and pay from company funds. Disclosure quality varies — check the firm’s terms for how it describes execution.

Account products marketed as skipping the evaluation entirely. The trade-off is usually tighter drawdown rules, lower initial payout splits, higher prices, or slower scaling than evaluation-based accounts at the same firm.

Paying to restart a failed evaluation account back to its starting parameters instead of buying a new one. Reset pricing, availability, and whether promos apply vary by firm and can change without notice.

The number of days a trader may need to trade before passing an evaluation or requesting a payout. Some firms define a qualifying day by activity or minimum profit, not just logging in.

The share of participants who pass an evaluation. Firm-published pass rates are hard to verify independently and rarely state their denominator (per account, per trader, per attempt) — treat marketing pass-rate claims with skepticism.

The maximum loss a trader can usually take in one trading day before breaching the account rules. Firms differ on whether open (unrealized) losses count, whether hitting it pauses trading or ends the account, and when the daily clock resets.

How firms handle it: Tradeify documents fixed daily loss limit values with a soft-pause model, while Topstep documents an optional, purchase-set daily loss limit (Tradeify help center · Topstep help center, checked Jul 3, 2026).

See which checked firms have one →

The account-level total loss cap. Unlike a daily loss limit, hitting the max loss limit usually ends the account. It may be static or trailing depending on the product.

How firms handle it: Topstep documents its Maximum Loss Limit as an end-of-day trailing cap in its help center (Topstep help center, checked Jul 3, 2026).

The largest permitted drop in account value under the firm’s rules. The calculation basis — balance vs equity, static vs trailing, end-of-day vs intraday — changes what “the same” percentage actually allows. See the drawdown entries below for the variants.

A drawdown limit that moves up as account equity or balance increases, so the loss floor follows your best performance. Whether it tracks open equity in real time or only closed end-of-day values is the difference that ends most accounts. At many firms the trail stops (locks) at a set level, such as the starting balance.

How firms handle it: My Funded Futures documents an end-of-day trailing model, while Apex Trader Funding documents an intraday trailing model that follows open equity (My Funded Futures help center · Apex help center, checked Jul 3, 2026).

Full guide → · See which checked firms use it →

A drawdown limit that stays fixed relative to the starting balance instead of trailing every new high-water mark. Usually easier to plan around than a trailing model, and often priced or sized accordingly.

How firms handle it: Funded Trading Plus documents a static maximum simulated loss measured from the starting balance (Funded Trading Plus help center, checked Jul 3, 2026).

See which checked firms use it →

Whether the drawdown floor updates only at session close (end-of-day) or continuously with open equity (intraday/real-time). An intraday trail can rise on an open winner and turn a scratched trade into a breach; an end-of-day trail ignores intraday peaks.

How firms handle it: compare Apex’s intraday trailing explanation with My Funded Futures’ end-of-day trailing model (Apex help center · My Funded Futures help center, checked Jul 3, 2026).

The highest balance or equity level an account has reached. Trailing drawdowns usually key off the high-water mark: each new high can raise the loss floor, depending on the firm’s calculation method.

Breaking an account rule — most often a drawdown or daily loss limit, but also prohibited strategies or inactivity. Consequences range from a warning or forced position close to immediate account failure, depending on the firm and the rule.

Some firms split rule violations into soft breaches (positions closed or trading paused, account survives) and hard breaches (account ends). Which rules fall into which bucket is firm-specific — never assume a daily loss limit is “soft” without reading the rule.

A rule that limits how much of a target, payout, or profit total may come from one trading day or narrow period — for example, no single day over a set percentage of total profit. Failing it usually delays payouts or passing rather than ending the account, but firms differ.

How firms handle it: Tradeify documents a percentage-based consistency rule for its funded accounts in its help center (Tradeify help center, checked Jul 3, 2026).

Full guide → · See which checked firms have one → · Check your numbers →

A ceiling on how much profit from a single day counts toward a target or payout, closely related to the consistency rule. Some firms cap the counted amount; others treat an oversized day as a consistency violation.

A trading behavior the firm says may breach the account agreement — commonly some forms of copy trading, latency or gap arbitrage, tick scalping, hedging across accounts, or news-event trading. Lists differ sharply between firms and change over time.

Limits on trading around scheduled economic releases. Implementations range from fully banned, to a blocked time window around high-impact events, to allowed in evaluations but restricted in funded stages.

See which checked firms restrict it →

Mirroring trades between accounts or from another trader or signal service. Firms commonly allow copying between your own accounts at the same firm but restrict copying across firms, from third parties, or beyond an account cap — and copy-trading rules are a frequent breach source.

Whether positions may be held past the session close or over the weekend. Many futures prop accounts require flat before close; forex firms vary from unrestricted to funded-stage-only limits. Breaking a flat rule can be treated as a hard breach.

The maximum number of contracts or lots a trader may hold under the account rules. Often scales with account size or performance, and may be stated in minis with micros counted as fractions.

The share of eligible profits a trader keeps after the firm’s rules, minimum days, and verification steps are satisfied. Splits can change with account age, scaling milestones, or product type at the same firm.

How often payouts can be requested — weekly, bi-weekly, monthly, or after a set number of qualifying winning days. The stated cadence often carries conditions (minimum days, buffers, caps) that stretch the real time to first payout.

How firms handle it: My Funded Futures publishes a payout policy overview describing its cadence and qualifying conditions (My Funded Futures help center, checked Jul 3, 2026).

Compare checked payout policies →

The smallest amount that can be withdrawn per request. Combined with buffers and splits, it sets the real profit you need before any money reaches you.

A profit amount that must remain in the account above a threshold before or after a withdrawal. Buffers protect the firm’s drawdown math but delay how quickly traders can take profits out.

How approved payouts are delivered — bank transfer, third-party payment processors, or crypto. Methods, fees, minimums, and processing times vary by firm and by trader country.

Compare checked payout methods →

A fee some firms charge after passing an evaluation, before the funded or payout-eligible account switches on. It may be one-time or recurring, and it’s easy to miss when comparing headline evaluation prices. Some firms advertise no activation fee as a selling point.

How firms handle it: Topstep’s product page lists the activation fee line item for its funded stage — shown as free at capture time — showing how firms display it (topstep.com, checked Jul 2, 2026).

Full guide → · Firms with no activation fee →

A recurring (usually monthly) charge for an evaluation account, data, or platform access. Subscription-priced evaluations can cost more than one-time-fee products if the evaluation takes months — total cost depends on how long you take.

A rule set for increasing account size, contract limits, or payout terms after a trader reaches specific milestones. Scaling can also work in reverse — some firms cut size after losses.

Identity verification (“know your customer”) that may be required before a funded stage, payout request, or account approval. Expect ID documents and sometimes proof of address; failing or delaying KYC delays payouts.

Whether and when evaluation fees are returned. A common pattern is refunding the fee with or after the first payout, but conditions (account type, promo purchases, resets) vary widely and are usually buried in the terms.

A firm declining a payout request, usually citing a rule breach, prohibited strategy, or verification issue found during review. Public denial reports are unverified claims unless the firm confirms them — read both the firm’s stated reason and the trader’s account before drawing conclusions.

A prop firm focused on exchange-traded futures — equity index, commodity, currency, interest-rate, or crypto futures contracts. Futures firms typically run simulated funded accounts and set limits in contracts rather than lots.

A prop firm focused on currency pairs and, in many cases, CFDs on indices, metals, or crypto. Instrument menus, leverage, and swap treatment depend on the firm’s platform and liquidity arrangements.

A standardized, exchange-traded agreement to buy or sell an asset at a set price on a future date. Prop accounts trade them speculatively and close before expiry; contract specs (size, tick value, hours) are set by the exchange, not the firm.

Contract for difference — an over-the-counter derivative that tracks an underlying price without exchange trading. Common at forex prop firms; pricing and execution come from the firm’s platform or liquidity provider, and availability varies by region.

Smaller-size versions of standard futures contracts — a micro is typically one-tenth of the corresponding e-mini. Firms often state contract limits in minis and count micros as fractions, which changes how much size a limit really allows.

The position-size unit in forex: a standard lot is 100,000 units of the base currency, with mini (10,000) and micro (1,000) fractions. Prop firm forex limits are usually stated in lots.

Trading exposure relative to account balance. In prop accounts leverage is set by the firm or platform per product; higher leverage makes both targets and breaches arrive faster.

The collateral required to hold a position. Futures platforms set intraday and overnight margins per contract; exceeding available margin can force-close positions regardless of the firm’s drawdown rules.

The smallest price increment of a futures contract and the dollar value of that move. Tick value is what converts “points against you” into dollars against your daily loss limit — know it per contract before sizing.

A per-trade or per-contract fee charged through the platform, data, or clearing arrangement. Commissions in prop accounts reduce net profit toward targets and payouts even when the headline account has “no fees.”

The difference between the bid and ask price. In forex/CFD prop accounts the spread is a built-in cost on every trade and can widen sharply around news events — one reason news-trading restrictions exist.

The overnight financing charge or credit applied to forex/CFD positions held past the daily rollover. Swap treatment varies by firm and account type; swap-free variants may exist with other costs adjusted.

The difference between the price you expected and the price you got filled at. Matters most around news and thin markets — and in simulated accounts, fill behavior may be more forgiving than a live market would be.

Market data supplied through a trading platform, exchange connection, broker, or technology provider. Futures data often carries exchange fees; some firms bundle it, others pass the cost to the trader.

Software used to chart, enter orders, monitor positions, and manage account activity. Prop firms support specific platforms per product; platform choice can affect fees, data, and which rules are enforced automatically.