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Plain-language explanations of proprietary-trading, firm-rule, and futures terminology — each with the detail that decides whether a rule costs you an account.
A prop firm glossary defines the terminology used by proprietary trading firms — the rules that fail accounts (trailing drawdown, daily loss limits, consistency rules), the fees that make up the real cost of getting funded, and the futures market mechanics your risk per trade depends on. The same word can mean different things at different firms, so each definition here describes general industry usage and flags where firms diverge.
What the products are — prop firms, evaluations, funded accounts, and what an account size actually buys you.
The rules that fail accounts and gate payouts — drawdown mechanics, consistency, position caps, and prohibited strategies.
Contract mechanics and execution — tick values, margin, order types, platforms, and the cost of a bad fill.
Educational summaries reviewed by Funded.Now Editorial Team on . Firms and platforms may define or apply the same term differently, so verify any rule in the current official program terms.
The terms that most often decide whether an evaluation passes and a payout clears.
A maximum drawdown whose floor moves up as the account makes new highs, so gains permanently raise the level at which the account breaches.
A limit on how much of an account's total profit may come from a single day or trade, applied most often as a condition of payout.
The cushion between your balance and the level that would breach the account — or the profit a firm requires above the starting balance before a payout.
The total loss an account may take before it is closed, measured from a reference point the firm defines as static, end-of-day, or trailing.
What a trader actually spends to reach a first payout — activation, monthly, data and reset fees included, not just the advertised challenge price.
The share of trading profits the trader keeps, with the remainder retained by the firm.
The dollar amount one tick of price movement is worth per contract.
A withdrawal of a trader's share of profits from a funded account, released under the firm's payout policy and eligibility rules.
A proprietary trading firm trades its own capital. Retail prop trading programs offer access to simulated or live accounts under firm-specific rules, often after a paid evaluation. Eligible traders can receive payouts under the program agreement. A funded account does not necessarily mean trades are placed in a live market.
Before buying an evaluation, check the drawdown type and calculation timing, profit target, daily loss limit, consistency rule, payout conditions, and total fees. End-of-day drawdown can still be trailing: it describes when the threshold updates. Compare the loss allowance with the profit target, rather than relying on the advertised account size.
No. Terms like trailing drawdown, consistency rule, and minimum trading days are applied differently between firms, and the difference is often material. These definitions describe general industry usage — always confirm the specific wording in the firm's own program terms.
A trailing drawdown raises the loss threshold as the account reaches new highs; a static drawdown keeps that threshold fixed. For example, a $50,000 account with a $2,000 allowance starts with a $48,000 floor. At a qualifying high of $51,000, a trailing floor rises to $49,000 while a static floor stays at $48,000. Update timing, unrealized gains, and any stop-trailing level depend on the program.
Use the comparison tools to review listed costs and rules, then confirm the applicable terms with the firm.
Compare Prop FirmsCME Group's glossary provides an exchange reference for futures market terminology. Prop firm account rules are separate: confirm drawdown calculations, account type, and payout requirements in your chosen firm's current program terms.