Prop Trading Glossary
Every industry term, defined in plain English. Bookmark this page — you'll come back to it.
The maximum loss allowed on an account before it's terminated. Measured daily or overall.
A paid test where you prove you can trade profitably within the firm's rules. Pass it to get funded.
A live account where you trade the firm's capital and split profits.
The percentage of profits you keep. Ranges from 70% to 100% depending on the firm.
The percentage gain you must reach to pass an evaluation phase — usually 8–10%.
A structured path to grow your funded account size after consistent profitable months.
A single evaluation phase, faster but usually stricter.
Two evaluation phases with lower daily targets — slower but more forgiving.
Skip the evaluation and trade a funded account immediately, usually with tighter drawdowns.
A rule that caps how much of your total profit can come from a single day or trade.
A restriction on holding positions through high-impact economic news events.
An automated trading algorithm. Some firms allow them, some don't.