Prop Firm Glossary

The most accounts one person, or one household, can hold at a firm at the same time. Firms often count funded accounts separately from evaluations, for example five funded accounts at once.

Also called Maximum accounts · Max accounts

How firms differ Some firms count by household rather than by person, and some set a lower limit on certain plans.

→ How it works, in the guide

The balance an evaluation is sold at, such as $50K. It is not money you hold: the max loss limit sets how far the balance can fall before the account fails, and what you can actually lose is what you pay.

How firms differ Some funded accounts start from $0 rather than the evaluation’s balance, so "locks at the starting balance" can mean $0 at one firm and $50,000 at another. Some firms describe the size as buying power rather than a balance.

→ How it works, in the guide

A one-off fee some firms charge to start your funded account after you pass.

How firms differ Some firms charge nothing; others charge a one-off fee, or take it from your first payout.

→ How it works, in the guide → Work it out: Prop Firm Expense Tracker

Trading with a bot or an algorithm. Many futures firms allow it with conditions; some ban it.

Also called Bot trading · Algorithmic trading

How firms differ Where it is allowed, a common condition is that you built the bot yourself, for your own use.

Your balance counts closed trades only; your equity also counts the profit or loss on trades still open. A loss limit can be measured on either, so read which one the firm uses.

Also called Account balance · Account equity

How firms differ At perps firms, equity often includes the fees and funding on open positions too, so holding a trade uses up room even when the price doesn’t move.

→ How it works, in the guide

Profit you must build above the starting balance before you can take a payout, and at some firms keep there afterwards. The word means different things at different firms, so read the firm’s own definition.

Also called Payout buffer · Buffer zone

How firms differ At some firms it is the max loss limit’s amount plus a small amount such as $100; at others it equals the whole drawdown, and taking a payout from inside it can cost you. Some firms use the word for padding on a rule instead.

→ How it works, in the guide

The cost per contract of every trade, usually charged in the evaluation as well as once funded. Commissions come out of your balance, so they count against your loss limits.

Also called Trading fees

How firms differ Some firms list the cost per side, others per round trip (both sides), so compare like with like. Perps firms charge a percentage of the position’s value on each fill instead.

→ How it works, in the guide → Work it out: Futures Position Size Calculator

A cap on how much of your profit can come from your single best day. Under a 50% rule, no one day can be more than half of your profit.

Also called Consistency percentage · Best day rule

How firms differ Each firm sets its own percentage, such as 30%, 40% or 50%. Many measure it against your total profit; some measure it against the profit target. Going over usually doesn’t fail the account: the target rises, or the payout waits, until your other days catch up.

→ How it works, in the guide → Work it out: Prop Firm Consistency Calculator

Placing the same trades on several accounts at once, usually with a trade copier. At prop firms it means copying your own trades across your own accounts, which many futures firms allow; copying another person’s trades, the usual meaning elsewhere, is commonly banned.

Also called Trade copying

How firms differ A few firms ban trade copiers altogether, and some cap how many accounts you can copy to.

→ How it works, in the guide

Margin shared across all your open positions, so the whole account backs each one and a losing trade can draw on the money behind the others.

The most you can lose in one trading day. A soft limit stops you trading for the rest of the day; a hard limit fails the account.

Also called Daily drawdown · Daily max loss

How firms differ Many firms that have one treat it as a pause for the rest of the day; some fail the account, even for a loss on a trade that is still open. Many plans have none.

→ How it works, in the guide → Work it out: Futures Position Size Calculator

The clock time a perps firm starts a new trading day for its daily loss limit, since the market never closes. Firms set their own time, such as midnight UTC.

Also called Daily reset · Daily drawdown reset

How firms differ Firms measure the new day from your balance or from your equity at the reset, so a trade still open at that moment can count differently from one firm to the next.

→ How it works, in the guide

The point where a trailing drawdown stops rising. Once you are far enough ahead, the limit stays put at or just above the starting balance.

Also called Locked MLL · Trailing lock

How firms differ Some firms stop it at the starting balance, others at the starting balance plus a small amount such as $100, and at some the first payout moves it up straight away.

→ How it works, in the guide → Work it out: Trailing Drawdown Calculator

A trailing drawdown that moves up only from your balance at the close of each trading day, so an open profit that comes back before the close does not drag the limit up with it.

Also called EOD trailing drawdown · EOD max loss limit

How firms differ At many firms an open trade that takes the balance below the limit still fails the account during the day: the limit only moves at the close, but it is checked in real time. Look for "open" or "unrealised" in the firm’s rule.

→ How it works, in the guide → Work it out: Trailing Drawdown Calculator

The paid test a prop firm sets before it funds you: reach a profit target on a simulated account without breaking its loss limits and, at some firms, trade a minimum number of days.

Also called Challenge · Combine · Assessment · Test

How firms differ Firms give it different names. Whatever it is called, read the profit target, the loss limits, any consistency rule and any minimum days.

→ How it works, in the guide

What you pay for an evaluation: either a monthly subscription that rebills until you pass or cancel, or a one-time price.

Also called Subscription

How firms differ Some firms bill monthly until you pass; others charge once. A one-time evaluation can still expire, for example after 30 days.

→ How it works, in the guide → Work it out: Prop Firm Expense Tracker

The account you trade after passing the evaluation, where your profits earn real payouts. At many futures firms it is still a simulated account: no orders reach the exchange, and the firm pays your share itself.

Also called Funded stage

How firms differ Firms name this stage differently, and the word "funded" itself varies: at one firm it means a simulated account, at another a real brokerage account. Read the firm’s own definition.

→ How it works, in the guide

A payment between buyers and sellers of a perpetual future at set intervals, which keeps its price close to the spot price. When the rate is positive, buyers pay sellers; when it is negative, sellers pay buyers.

Also called Funding · Funding fee

How firms differ Some perps firms pass funding through to your account; others charge a holding fee of their own instead. Either way it changes your equity, so it counts in your loss limits.

→ How it works, in the guide

Breaking a rule that fails the account outright, such as falling below the max loss limit.

→ How it works, in the guide

Holding opposite positions in the same or a closely related market at the same time, in one account or across accounts. Prop firms generally ban it across accounts, and some ban it against an account at another firm too; on a single account the rules differ.

How firms differ Some firms ban long minis against short micros in one account; others allow it.

→ How it works, in the guide

A firm’s own charge on positions held open, which some perps firms use instead of passing funding through. It counts against your loss limits like any other cost.

Also called Swap fee

→ How it works, in the guide

Checking that you are who you say you are, usually with a photo ID and a selfie, before a firm funds you or pays you. Often called KYC, short for know your customer.

Also called ID verification · Identity check

How firms differ Firms ask at different points: before a second purchase, before the funded account starts, or before the first payout. Some also ask for proof of address, allow only one verified profile per person, and bar VPNs during the check.

→ How it works, in the guide

A rule that closes an account left without a trade for a set number of days.

How firms differ The number of days differs by firm, a week for example, and some apply it only to certain account types.

→ How it works, in the guide

An average of a coin’s spot price across several exchanges. Perps venues use it to work out funding and the mark price.

An account sold without an evaluation, so you trade on funded-account rules from the first day.

Also called Direct funding · Straight to funded

→ How it works, in the guide

A trailing drawdown that follows your highest balance in real time, open profit included, so a trade that runs up and comes back raises the limit anyway.

Also called Intraday drawdown · Real-time trailing drawdown

How firms differ Some firms use end-of-day in the evaluation and switch to intraday once you are funded.

→ How it works, in the guide → Work it out: Trailing Drawdown Calculator

Margin set aside for one position only, so if that position is liquidated you lose its margin and nothing more.

The size of a position compared with the money set aside to hold it. At 5x, $2,000 of margin holds a $10,000 position. Perps prop firms limit leverage, some with a different cap for each market.

How firms differ Some firms fix leverage per market, for example 5x on bitcoin and 2x on smaller coins; others let you choose up to a cap.

→ How it works, in the guide

The price at which a perps position is closed automatically because the margin behind it has fallen to the minimum the venue requires, called the maintenance margin. Higher leverage puts it closer to your entry, and at a prop firm a loss limit can end the account before it is reached.

→ How it works, in the guide

A real brokerage account, where your orders reach the exchange. Some firms move a sim-funded trader to live after a run of payouts, usually after a review, and the balance, the rules and the data fees can change when they do.

Also called Live funded account · Live brokerage account

How firms differ Some firms review you for live after a set number of payouts, three or five for example; others decide at their own discretion, and a trader may not be able to turn the move down. At some firms part of the balance, or of your past profit, is held in a reserve that you can unlock later by meeting the firm’s conditions.

→ How it works, in the guide

Fees charged as a percentage of a trade’s value. A maker order adds to the order book, such as a limit order that waits; a taker order fills straight away against it, and usually pays the higher rate.

How firms differ Some perps firms charge one flat rate; others pass the venue’s maker and taker rates through.

→ How it works, in the guide

The price a perps venue uses to value open positions and decide liquidations, built mainly from the index price so that one stray trade cannot set it off. A stop can trigger on the last traded price while your loss is measured on the mark price.

The exchange’s charge for live prices, which applies to simulated accounts too. Many firms cover basic data in the evaluation; some pass the cost on once you’re funded or move to a live account.

Also called Data fee · Exchange data fee

How firms differ Traders classed as professional under the exchange’s data agreement, depth-of-market data and live accounts can each cost extra, at some firms per exchange, per month.

→ How it works, in the guide → Work it out: Prop Firm Expense Tracker

The most contracts you can hold at once, set by plan and account size and, at some firms, by your profit. Most firms count ten micros as one mini. A platform can still fill an order over the limit, and that fill breaks the rule.

Also called Contract limit · Max position size · Max size

How firms differ Perps firms cap leverage or the value of your positions instead of counting contracts.

→ How it works, in the guide → Work it out: Futures Position Size Calculator

The lowest your balance can go before the account fails, set a fixed amount below the starting balance, such as $2,000 on a $50K account. Whether it then moves up with your profit is what "trailing" means.

Also called Maximum drawdown · Max drawdown · Loss limit

→ How it works, in the guide → Work it out: Futures Position Size Calculator

A smaller version of a futures contract. The equity index micros are a tenth the size of their minis: MNQ to NQ, MES to ES, MYM to YM. Most prop firm contract limits count ten of these micros as one mini.

Also called Micros · Micro E-mini

How firms differ Not every micro is a tenth of its larger contract, and some firms count crypto micros as full contracts.

→ Work it out: Futures Position Size Calculator

Making your profit from trades held for only seconds. Firms that ban it say a simulated account can fill these trades in a way a real market might not, and they can review your trades and remove the profit, refuse a payout or close the account.

Also called Tick scalping

How firms differ Firms that check set their own threshold, for example that at least half of your profit must come from trades held longer than ten seconds; some also look at how few ticks a trade made, and some warn you before acting.

→ How it works, in the guide

The fewest days you must trade before you can pass or request a payout, however much you have made.

Also called Minimum days

How firms differ Some firms have none; others ask for several days. What counts as a day differs too.

→ How it works, in the guide

A restriction on trading around major economic releases, often a ban from a couple of minutes before to a couple of minutes after the biggest ones, sometimes called tier-one or red-folder news.

Also called News trading restriction · News trading rule

How firms differ Some firms restrict news only on funded accounts; some allow it but bar trading your full size into a release; others don’t restrict news at all.

→ How it works, in the guide

The full value of a position: its size times the price. For example, 0.5 bitcoin at $60,000 has a notional value of $30,000, whatever the margin behind it.

Also called Position value

→ How it works, in the guide

Keeping a position open past the afternoon cut-off. Many futures prop firms require you to be flat by a set time each afternoon; some close what’s left for you, and at others holding past it breaks the rules.

Also called Holding overnight

How firms differ The cut-off time differs by firm, so check it against your own time zone. A few firms sell accounts that allow holding overnight and over the weekend. Perps markets never close, and some perps firms let positions run overnight and over the weekend, a few only for a set number of days; funding or holding fees keep adding up while they do.

→ How it works, in the guide

The share of evaluations that end in a pass. Any figure depends on what is counted, such as accounts or traders, so check how a published rate was worked out.

Also called Success rate

→ How it works, in the guide

Money the firm pays you from your funded account’s profit, after its split. Firms set the conditions: usually a minimum amount, how often you can ask, often a cap per request, and rules such as winning days.

Also called Withdrawal · Reward · Performance fee

How firms differ Firms call payouts different things, such as withdrawals, rewards or performance fees, and set different minimums, caps and schedules.

→ How it works, in the guide

The most you can withdraw in one request, often a share of the balance or the profit up to a dollar limit.

Also called Max payout · Withdrawal limit

How firms differ A common form is half of the balance or profit per request, up to a cap set by account size. Some firms also limit how many payouts an account can take, or the total, before it closes or moves to live.

→ How it works, in the guide

When a firm refuses all or part of a payout request, often because a review of your trades found a broken rule. Read the firm’s list of banned trading practices before you ask for a payout, not after.

Also called Payout rejection · Denied payout

How firms differ Firms list different reasons, such as trades held only seconds or hedging across accounts. Some remove only the profit from the trades in question; others delay the payout or close the account.

→ How it works, in the guide

A futures contract with no expiry date. Instead of expiring, it stays close to the spot price through funding payments between buyers and sellers. Perps trade mainly on crypto exchanges, and many are priced in dollar stablecoins such as USDT.

Also called Perps · Perpetual swap · Perpetual contract

→ How it works, in the guide

A prop firm that funds traders on perpetual futures rather than CME futures. The evaluation, the loss limits and the profit split work the same way; the market trades around the clock, and leverage takes the place of contract counts.

Also called Crypto prop firm · Perpetual futures prop firm

How firms differ Some perps firms list crypto only; others add perps on gold, oil, indices or single stocks.

→ How it works, in the guide

The share of your funded account’s profit that you keep, such as 80% or 90%.

Also called Profit share

How firms differ Some firms change the split with each payout or with the size of the withdrawal, and some pay you all of your profit up to a set amount before the split starts.

→ How it works, in the guide

The profit you need to pass an evaluation, such as $3,000 on a $50K account. Reaching it is not always enough: any minimum days and consistency rule still have to be met.

How firms differ Some firms count open profit towards the target; others count only closed trades.

→ How it works, in the guide

A company that lets you trade an account it provides in exchange for a share of the profits. Retail futures prop firms usually sell this as an evaluation: pass it and you trade a funded account, which at many firms is simulated, with the firm paying your share itself. The name comes from proprietary trading, where a firm trades its own money.

Also called Proprietary trading firm · Funded trader program

→ How it works, in the guide

A monthly evaluation fee taken again on its renewal date. A reset doesn’t cancel it, and passing one account leaves your other subscriptions running, so cancel what you no longer use.

Also called Renewal · Recurring billing

How firms differ At some firms a reset moves the next rebill date later, for example to 30 days after the reset; at others the date doesn’t change.

→ How it works, in the guide → Work it out: Prop Firm Expense Tracker

Paying to restart an evaluation, and at some firms a funded account, with a fresh balance after breaking a rule or falling behind.

How firms differ Some firms don’t offer resets on funded accounts, or charge far more for them than for an evaluation reset, sometimes only before your first payout. Some perps firms offer no reset at all: you buy a new evaluation.

→ How it works, in the guide → Work it out: Prop Firm Expense Tracker

A schedule that sets how many contracts you can trade by how much the account has made: more as the profit grows and, at some firms, fewer again if it falls.

How firms differ Some firms have no scaling plan and allow the full size from the first day; at others it applies in the evaluation too.

→ How it works, in the guide

A funded account that runs as a simulation, on live prices, with no orders reaching the exchange. Your profit is counted in the simulation, and the firm pays your share of it as real money.

Also called Simulated funded account

→ How it works, in the guide

The gap between the price you expected and the price you got, most likely on stop and market orders in a fast market. At a prop firm it matters because a fill past your stop can take the balance through a loss limit.

How firms differ Simulated accounts can show less slippage than a real market, and some firms ban strategies built to profit from that.

→ How it works, in the guide

Breaking a rule that pauses the account, usually until the next session, without failing it. A daily loss limit is the usual example.

→ How it works, in the guide

A payout in a dollar-pegged crypto token such as USDT or USDC, sent to your wallet. Check the network the firm sends on: tokens sent on the wrong network can be hard or impossible to recover.

Also called USDT payout · USDC payout · Crypto payout

→ How it works, in the guide

A max loss limit that doesn’t follow your balance: it stays a fixed amount below the starting balance however much you make.

Also called Fixed drawdown

→ How it works, in the guide → Work it out: Trailing Drawdown Calculator

Software that places one account’s trades on your other accounts at the same time, each at its own size. It runs on your own computer or in the cloud.

→ How it works, in the guide

One session as the firm counts it, usually from the 18:00 New York open to the next afternoon’s close.

How firms differ Some firms count any day with a trade; others need the day to net a minimum amount, profit or loss, before it counts. At perps firms, whose market never closes, the day ends at a reset time the firm sets.

→ How it works, in the guide

A record of your trades, kept by hand or imported from your platform, used to review your results by setup, session and size.

The software you place orders in, such as NinjaTrader, Tradovate or TradingView. A platform is not a prop firm: the firm gives you an account, and you trade it through a platform the firm supports.

→ How it works, in the guide

A max loss limit that rises as your account makes new highs, staying the same distance below them until it reaches its lock, where the firm sets one, and doesn’t move back down as your balance falls. Whether the high is measured every tick or only at the close is the difference between intraday and end-of-day.

Also called Trailing threshold · Trailing max drawdown

→ How it works, in the guide → Work it out: Trailing Drawdown Calculator

The profit or loss on a trade that is still open; it becomes realised when you close the trade. Many prop firm limits count it, so an open loss can fail the account before you close the trade.

Also called Open P&L · Open equity · Floating P&L

How firms differ On an intraday trailing drawdown an open profit also moves the limit up; on an end-of-day drawdown only the closing balance moves it.

→ How it works, in the guide

A day that clears a set profit, which some firms use as a payout condition.

Also called Profitable day

How firms differ The amount differs by firm and, at some firms, by account size, for example $150 on a smaller account and $250 on a larger one.

→ How it works, in the guide