Guides / Glossary
Prop firm glossary
Plain-English meanings of the terms prop firms use. Each firm defines them slightly differently, so check the firm page for its exact wording.
- Static drawdown
- Your maximum loss level is fixed from the starting balance. On a $100K account with a 10% static max loss, you fail if equity drops below $90K, however much profit you made first.
- Trailing drawdown
- The loss limit moves up as your account makes new highs, so profit you've made can still be lost. Some firms stop trailing once the limit reaches the starting balance.
- End-of-day (EOD) trailing
- A trailing drawdown that only moves up at the daily close, based on the closing balance or equity. Swings during the day don't move it, but a big open profit that you give back can still count.
- Intraday trailing
- A trailing drawdown that moves with your highest equity in real time, including unrealised profit. This is the strictest type.
- Daily loss limit
- The most you can lose in one trading day, usually measured from that day's starting balance or equity at the firm's server reset time. Breaking it usually fails the account.
- Max loss
- The overall loss limit for the whole account, static or trailing. Breaking it ends the account.
- Consistency rule
- A cap on how much of your total profit can come from one day (or one trade). With a 40% rule and $5,000 total profit, no single day can be over $2,000. Otherwise you trade on until it fits, or the payout is reduced.
- Best Day Rule
- A type of consistency rule: your biggest winning day must be no more than a set percentage of total profit.
- Minimum trading days
- How many separate days you must place (or hold) a trade before passing a phase or asking for a payout.
- Profit split
- The share of profit paid to you, such as 80%. Some firms raise it over time or sell add-ons for a higher split.
- Evaluation / challenge
- The paid test you pass before getting a funded account. 1-Step, 2-Step and 3-Step means how many phases there are.
- Instant funding
- A funded account with no challenge. It's usually more expensive and has stricter drawdown or consistency rules.
- Funded account
- The account you trade after passing. At most firms it's simulated (demo) and payouts are paid by the firm.
- News trading restriction
- A ban on opening or closing trades a few minutes either side of high-impact news, or a cap on the profit from those trades.
- Weekend holding
- Keeping a trade open over the weekend market close. Many firms ban it on standard funded accounts or sell a swing version.
- EA
- Expert advisor: an automated trading program on MT4 or MT5. Firms often allow your own EAs but ban copied, bought or high-frequency ones.
- Copy trading
- Copying trades between accounts. Usually only allowed between your own accounts at the same firm.
- Our term for a rule found only in the terms, FAQ or help centre, not in the headline rules, that can breach an account, void profit or delay a payout.
- Gambling clause
- A clause letting the firm void profits from trading it sees as gambling, such as one huge lot or all-in risk on one trade.
- Round-turn commission
- The commission for opening and closing one lot. Per side × 2 = round turn.