Prop firm glossary

A company that gives you a trading account after a paid evaluation. If you follow its rules, you keep a share of the profits; your loss is limited to the evaluation fee. See : Prop firms

The paid test you must pass to get a funded account: reach a profit target without breaking the loss limits. See : Challenges

Number of evaluation phases. 1-step means one target; 2-step means a target in phase 1, then a smaller one in phase 2 (verification), often with looser limits. See : One-step prop firms

A funded account from day one, with no evaluation phase. More expensive upfront, often with stricter rules (consistency, trailing drawdown). See : Instant funding prop firms

The account you get after the evaluation: profits on it entitle you to payouts, under the firm's rules.

The gain you must reach to pass an evaluation phase.

Example : 10% on a $100,000 account = $10,000 of profit to make.

How much you can lose in a single day before the account is closed.

Example : 5% on $100,000: at most $5,000 lost in the day.

The maximum loss allowed on the account. If your balance falls below this limit, the account is closed. See : Prop firm rules

Example : 10% on $100,000: the account is closed below $90,000.

The limit is fixed, based on the starting balance: it does not rise with your profits. See : Prop firm rules

Example : $100,000 account, limit at $90,000: it stays there even if the account rises to $110,000.

The limit rises with your highest balance. A gain followed by a pullback can be enough to hit it. See : Prop firm rules

Example : 6% limit on $100,000: the account rises to $104,000, the limit moves from $94,000 to $98,000.

A trailing drawdown recalculated only at the daily close, not during your trades. See : Prop firm rules

Example : An intraday peak at $103,000 does not lift the limit if the day closes at $101,000: the limit follows $101,000.

Your best day must not exceed a set share of your total profits. See : Prop firm rules

Example : 40% rule and $10,000 of profit: best day capped at $4,000.

The share of profits you keep; the rest goes to the prop firm.

Example : 80% split on $1,000 of profit: $800 for you.

Withdrawing your share of the profits. Each firm sets a schedule (every 2 weeks, on demand…), a processing time and sometimes a minimum amount. See : Fastest-paying prop firms

A fee paid once you pass the evaluation, before you get the funded account (mostly in Futures). We add it to the price to compute the real cost. See : How much a prop firm costs

Buying a failed evaluation again, often at a discount, to start over. It is not included in our real cost.

Common in Futures: the evaluation is billed every month until you pass. We never compare it with a one-off price. See : How much a prop firm costs

A small entry fee, then fees due only if you pass. The total can exceed a regular evaluation. See : How much a prop firm costs

Public evaluation price + recorded activation fees. It is the figure shown in our reviews, our challenge table and our pricing guide. See : How much a prop firm costs

An increase in capital or profit split granted when you stay profitable for several months.

The number of days you must trade, sometimes with a minimum gain, before passing a phase or requesting a payout. See : Prop firm rules

Opening or holding positions during economic announcements. Many firms ban it a few minutes before and after, especially once funded. See : Prop firm rules

A program that places orders for you. Often allowed, but high-frequency trading, arbitrage and copy trading between accounts are often banned. See : Prop firm rules

Keeping a trade open from Friday evening to Monday. Banned at many Futures firms, sometimes reserved for a “swing” account. See : Prop firm rules

How much the firm lets you control per $1 of capital. Lower leverage limits position size.

Example : 1:100 leverage: a $100,000 position uses $1,000 of margin.

Contracts listed on a regulated exchange (CME: NQ, ES, CL…). Futures prop firms often use a subscription and a max loss in dollars. See : Best Futures prop firms

Currencies, indices, gold and other products traded over the counter, on MT5, cTrader or other platforms. See : Best Forex prop firms

Identity check (ID document, proof of address) required before the funded account or the first payout.

A score out of 10 computed from 5 weighted criteria: payouts 30%, rules 25%, price 20%, support 15%, reputation 10%. It does not depend on any commission. See : Methodology