GLOSSARY · 8 DEFINITIONS
Prop-firm terms, clearly defined.
Plain definitions with worked examples to help you read account rules and compare prop firms.
Featured definitions
Profit target
The profit you must reach to pass a phase, as a share of the starting balance.
8% on a $100K Phase 1 is $8,000. Phase 2 at 5% is another $5,000.
Daily loss limit
The most the account may lose in one trading day, counted from the balance or equity at the daily reset.
4% on $50K is $2,000. $1,400 closed plus $900 floating is $2,300, so the account ends.
Static drawdown
A loss line fixed at the starting balance minus the maximum loss. It never moves.
10% static on $100K: the account ends if equity touches $90,000, whatever you made first.
Trailing drawdown
A loss line that follows your high-water mark up by the same distance and never moves down.
10% trailing on $100K after a peak of $104,200: the line is at $94,200.
End-of-day drawdown
A trailing line that moves only at the daily close, using the closing balance. Intraday peaks don’t raise it.
Equity touches $104,200 but the day closes at $103,600: tomorrow’s line is $93,600.
See also:
Consistency rule
A cap on how much of your total profit a single day may contribute before a payout is approved.
With a 35% cap and $5,150 profit, your best day may be at most $1,802.50.
Reward cycle
The wait between payout requests. Firms count it from the first funded trade or from the last payout.
Bi-weekly: request on day 14, then every 14 days after the previous payout.
Scaling plan
A schedule that raises the account size or your split after steady, profitable cycles.
+25% account size after four months with 10% net profit and no breach.
All 8 terms, A to Z
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