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Glossary
Every term a funded trader meets — drawdown mechanics, conduct rules, payout language — defined in plain words. The same decoded-rule knowledge behind the firm rulebooks, minus the jargon.
56 terms · updated with the rulebook.
An evaluation with a single phase: one profit target, then funded.
Read the definitionThe classic two-phase evaluation: a first target (~8–10%), a second easier one (~5%), then funded.
Read the definitionClosed-trade account value. Balance-based rules ignore floating P&L; equity-based rules include it.
Read the definitionViolating a hard account rule — most often a drawdown limit — which ends the evaluation or funded account.
Read the definitionThe paid test a prop firm uses to qualify traders: reach a profit target without breaching drawdown or the firm's rules.
Read the definitionThe per-lot fee charged on execution, typically quoted per round turn (open + close).
Read the definitionA cap on how much of total profit may come from a single day (or trade) — exceeding it can block passing or payouts.
Read the definitionMirroring trades between accounts or traders — usually allowed between YOUR OWN accounts, banned across different people.
Read the definitionThe maximum you may lose in one trading day, commonly 4–5%, resetting at a fixed server time.
Read the definitionThe decline from an account's reference level (starting balance or equity peak) — the loss budget a prop trader must never exhaust.
Read the definitionAutomated trading code on MetaTrader — allowed at many firms, but copy-EAs and exploit-EAs are banned nearly everywhere.
Read the definitionA trailing drawdown recalculated only at the daily close, ignoring intraday equity peaks.
Read the definitionAccount value including open positions: balance + floating P&L.
Read the definitionThe account a trader manages after passing the evaluation, trading the firm's capital for a profit share.
Read the definitionUmbrella term for the evaluation-to-funded pipeline retail prop firms sell.
Read the definitionA conduct clause banning bet-the-account behaviour: max-size punts, martingale, one-shot passes.
Read the definitionThe risk of price opening far from the previous close — weekends and session opens — jumping over stops entirely.
Read the definitionHard breach = account terminated (drawdown limits). Soft breach = trades closed or payout affected, account survives.
Read the definitionHolding offsetting positions — same-account hedging is often allowed; cross-account or cross-firm hedging is banned.
Read the definitionSub-second, high-volume order strategies — banned at virtually every retail prop firm.
Read the definitionAccounts are closed or archived after a period without trading — commonly 14–30 days.
Read the definitionA funded account bought outright — no evaluation phase, higher fee, usually staged payouts.
Read the definitionIdentity verification (ID + proof of address) required before payouts — the moment aliases and shared accounts die.
Read the definitionExploiting a delayed price feed by trading against a faster one — universally banned and payout-voiding.
Read the definitionBuying power relative to account size (e.g. 1:100). It scales position capacity, not your risk budget.
Read the definitionForex position size units: standard = 100,000 base currency, mini = 10,000, micro = 1,000.
Read the definitionA requirement that every position carries a stop-loss, sometimes within seconds of entry.
Read the definitionThe collateral reserved to hold a position, set by leverage and size.
Read the definitionDoubling position size after losses to recover — treated as gambling and banned or restricted by many firms.
Read the definitionThe cap on total funded capital one trader may manage at a firm, across all accounts.
Read the definitionThe total loss limit for the life of the account, typically 8–12% of starting size.
Read the definitionA cap on position size or open risk per trade, absolute (lots) or relative (% of account).
Read the definitionThe dominant retail forex platforms; MT5 is the modern multi-asset version most prop firms now offer.
Read the definitionA floor on how long a position must stay open (e.g. 60 seconds+) — an anti-tick-scalping rule at some firms.
Read the definitionThe fewest distinct days you must place trades before passing a phase or requesting a payout.
Read the definitionRestrictions on operating many accounts or sharing access: one person per account, caps per person, no account management.
Read the definitionRules limiting opening/holding positions around high-impact economic releases (NFP, CPI, FOMC).
Read the definitionKeeping positions open past the daily session close — restricted mainly at futures firms.
Read the definitionHow often a funded trader can withdraw profit — weekly, bi-weekly, monthly, or on-demand.
Read the definitionThe standard price increment in forex: 0.0001 for most pairs, 0.01 for JPY pairs.
Read the definitionChoosing trade size from risk: lots = (account × risk%) ÷ (stop distance × pip value).
Read the definitionThe percentage of profits the trader keeps from a funded account — commonly 80–90%, sometimes scaling to 100%.
Read the definitionThe percentage gain required to pass an evaluation phase — commonly 8–10% for phase one, ~5% for phase two.
Read the definitionThe firm's list of banned approaches: exploits (latency/tick), copy services, gambling patterns, cross-account hedging.
Read the definitionA company that gives traders access to its own capital in exchange for a share of the profits, usually after a paid evaluation.
Read the definitionAn evaluation fee returned (usually with the first payout) once you're funded and paid.
Read the definitionPaying to restart a failed or in-progress evaluation, often at a discount, keeping the same program.
Read the definitionA firm's program for growing a funded account (or split) after consistent profitable periods.
Read the definitionA 'funded' account that runs on simulated execution: real payouts, demo fills.
Read the definitionThe gap between your intended price and the actual fill — largest around news spikes and market opens.
Read the definitionThe difference between bid and ask — the built-in cost of every round trip.
Read the definitionA fixed loss floor measured from the starting balance — profit does not move it.
Read the definitionThe financing cost or credit applied to positions held overnight, from the interest differential of the pair.
Read the definitionA loss limit that follows your equity peak upward: profit raises the floor beneath you.
Read the definitionThe second, easier stage of a 2-step evaluation — typically half the phase-one target under the same risk rules.
Read the definitionKeeping positions open over the weekend — forbidden by many firms, essential for swing traders.
Read the definition