Prop Trading Glossary
59 essential terms explained in plain language.
From drawdown rules to payout methods — everything you need to know.
Account Size
The amount of capital in a funded trading account, typically ranging from $5,000 to $400,000.
Account TypesActivation Fee
An additional fee some firms charge after passing the challenge, before receiving the funded account.
Costs & PricingChallenge Fee
The one-time payment required to enter a prop firm evaluation challenge, typically ranging from $50 to $1,100.
Costs & PricingConsistency Rule
A rule requiring traders to maintain consistent daily or weekly performance — no single day should account for an excessive share of total profits.
Trading RulescTrader
A modern trading platform known for fast execution, Level II pricing, and advanced charting capabilities.
Platforms & TechnologyCopy Trading
Automatically replicating trades from one account to another, allowing traders to mirror successful strategies.
Trading StrategiesDrawdown
The maximum amount your account balance can decline from its peak before the account is terminated.
Risk ManagementDay Trading
A trading style where all positions are opened and closed within the same trading day — no overnight holding.
Trading StrategiesDiscount Code
A coupon or voucher code that offers a percentage or fixed-amount discount on prop firm challenge purchases.
Industry TermsEvaluation Challenge
A test phase where traders must meet profit targets while staying within risk limits to qualify for a funded account.
Getting StartedEnd-of-Day (EOD) Drawdown
A drawdown type that only recalculates at the end of each trading day based on closing balance, not intraday highs.
Risk ManagementExpert Advisor (EA)
An automated trading program that runs on MetaTrader platforms, executing trades based on pre-programmed rules.
Platforms & TechnologyE-mini
Electronically traded futures contracts that are a fraction of the size of standard futures contracts — popular in prop trading.
Markets & AssetsFunded Account
A trading account provided by a prop firm with real capital that a trader can use to trade and earn profits.
Getting StartedFree Reset
A feature offered by some prop firms that allows traders to restart a failed challenge at no additional cost.
Costs & PricingForex Trading
Trading currency pairs (e.g., EUR/USD, GBP/JPY) on the foreign exchange market — the largest financial market by volume.
Markets & AssetsFutures Trading
Trading standardized contracts to buy or sell an asset at a future date and price — common markets include ES, NQ, and CL.
Markets & AssetsLeverage
The use of borrowed capital to increase the size of a trade position beyond what your account balance alone would allow.
Markets & AssetsLot Size
The standardized unit of measurement for a trade — 1 standard lot in forex equals 100,000 units of the base currency.
Markets & AssetsMax Daily Loss
The maximum amount a trader can lose in a single trading day before the account is flagged or terminated.
Risk ManagementMinimum Trading Days
The minimum number of days a trader must actively trade during an evaluation or before requesting a payout.
Trading RulesMetaTrader 4 (MT4)
A popular forex trading platform developed by MetaQuotes, widely used by prop firms for forex and CFD trading.
Platforms & TechnologyMetaTrader 5 (MT5)
The successor to MT4, offering additional features like more order types, more timeframes, and a built-in economic calendar.
Platforms & TechnologyMartingale Strategy
A high-risk strategy where traders double their position size after each losing trade to recover losses with one winning trade.
Trading StrategiesNews Trading Restriction
A rule that prohibits or limits trading during high-impact news events like NFP, FOMC, or CPI releases.
Trading RulesNinjaTrader
A professional trading platform primarily used for futures trading, offering advanced charting and order flow tools.
Platforms & TechnologyOne-Step Challenge
An evaluation with a single phase — pass one profit target to get funded.
Account TypesOvernight Holding
Whether a prop firm allows traders to keep positions open past the daily market close into the next trading day.
Trading RulesProp Trading Firm
A company that provides traders with capital to trade financial markets in exchange for a share of the profits.
Getting StartedPosition Sizing
Determining how large a trade position to take based on account size, risk tolerance, and the distance to your stop-loss.
Risk ManagementProfit Split
The percentage of trading profits that a trader keeps vs what the prop firm retains.
Payouts & ProfitsPayout
The process of withdrawing earned profits from a funded trading account.
Payouts & ProfitsPayout Frequency
How often a prop firm allows traders to withdraw profits — daily, weekly, bi-weekly, or monthly.
Payouts & ProfitsPayout Methods
The different ways prop firms transfer profits to traders — bank wire, crypto, Rise, PayPal, etc.
Payouts & ProfitsProfit Target
The minimum percentage of profit a trader must achieve during an evaluation phase to pass to the next step or receive funding.
Trading RulesPip
The smallest standard unit of price movement in forex — typically the fourth decimal place (0.0001) for most currency pairs.
Markets & AssetsProp Firm Scam
A fraudulent prop firm that takes challenge fees without intending to fund traders or pay out profits.
Trust & SafetyPFM Score
PropFirmMap's composite ranking score that combines multiple factors to rank prop firms objectively.
Trust & SafetyProp Firm Affiliate Program
A partnership program where affiliates earn commissions for referring new traders to a prop firm.
Industry TermsPromo Code
A discount code that reduces the challenge fee when purchasing a prop firm evaluation.
Industry TermsPayout Proof
Evidence (usually screenshots or certificates) that a trader has successfully received a profit payout from a prop firm.
Industry TermsProp Firm Comparison
The process of evaluating multiple prop firms side-by-side across key factors like pricing, rules, platforms, and trust.
Industry TermsRisk Management
The set of rules and strategies used to control potential losses and protect trading capital.
Risk ManagementRefundable Fee
A challenge fee that is returned to the trader after they pass the evaluation and receive their first payout.
Costs & PricingRithmic
A professional-grade data feed and execution infrastructure used by many futures prop trading firms.
Platforms & TechnologyScaling Plan
A program that increases a trader's account size over time based on consistent profitable performance.
Account TypesStatic Drawdown
A fixed drawdown limit calculated from the initial account balance that does not move regardless of profits.
Risk ManagementStop-Loss
An order that automatically closes a trade when the price reaches a specified loss level, limiting potential losses.
Risk ManagementSpread
The difference between the bid (selling) and ask (buying) price of an instrument — the implicit cost of each trade.
Markets & AssetsSafety Grade
A letter grade (A+ to F) assigned by PropFirmMap based on multiple trust and safety factors for each prop firm.
Trust & SafetyScalping
A trading strategy that aims to profit from very small price movements by entering and exiting trades within seconds to minutes.
Trading StrategiesSwing Trading
A trading style that holds positions for days to weeks, aiming to capture larger price moves and trends.
Trading StrategiesTwo-Step Challenge
An evaluation with two phases — traders must meet profit targets in both steps to receive funding.
Account TypesTrailing Drawdown
A drawdown limit that moves up (but never down) as your account balance increases, locking in profits as a new floor.
Risk ManagementTrading Restrictions
The set of limitations prop firms place on how, when, and what traders can trade on funded accounts.
Trading RulesTrading Platform
The software used to execute trades, analyze charts, and manage positions on a funded account.
Platforms & TechnologyTrustPilot Rating
A review score on TrustPilot.com that reflects customer satisfaction, commonly used to evaluate prop firm reputation.
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