Prop firm glossary

A quick reference for the jargon. For the concepts behind these, see the other guides.

Account & evaluation

Evaluation (challenge) — A paid test of your trading under a fixed rule set. Pass it to reach a funded (usually simulated) account.

One-step / two-step — How many evaluation phases you must pass. One-step is faster; two-step usually has gentler targets per phase.

Instant funding — Skip the evaluation by paying more upfront; you start on a funded account immediately, typically with stricter rules or lower initial limits.

Reset — Paying (often at a discount) to restart an evaluation after a failure rather than buying a new one.

Activation fee — A one-time or monthly fee to turn on or maintain a funded account, sometimes including market-data fees. Common with futures firms.

Risk & rules

Drawdown — Your maximum allowed loss. The model matters: see trailing vs EOD vs static.

Trailing drawdown — A loss limit that follows your peak upward. Intraday trailing tracks your highest unrealized equity (harshest); end-of-day (EOD) trailing tracks your daily closing balance (gentler).

Static drawdown — A fixed loss limit set from your starting balance that never moves. Most predictable.

Daily loss limit — A separate cap on how much you can lose in a single day, on top of the overall drawdown.

Consistency rule — A cap on how much of your total profit one day or trade may represent (often 20–40%). Designed to filter out one-off gambles; a frequent cause of withheld payouts.

Minimum trading days — The least number of active days required before you can pass or withdraw.

Payouts & money

Profit split — Your share of profits. The advertised “up to” number is a ceiling; what matters is the base split and how you scale.

Scaling plan — A path to a larger account and/or higher split as you stay consistently profitable.

Payout cycle — How often you can withdraw: a fixed interval (e.g. every 14 days) or on-demand (anytime, often with a consistency condition).

Profit target — The gain you must reach to pass an evaluation phase, usually a percentage of the starting balance.

Profit buffer — Profit you must leave in the account rather than withdraw.

Conduct

Prohibited strategies — Methods that can void results even if profitable: news scalping (program-dependent), HFT/latency tactics, copy trading, cross-account hedging, and martingale/grid gambling.

KYC — “Know Your Customer” identity verification, usually required before your first payout.

TradeMoneta terms

PFM Score — Our 0–10 score computed only from objective official-site facts (payout speed, split, drawdown model, platforms, sizes, fee). See the methodology.

Verified vs Provisional — Verified means we’ve confirmed a firm’s inputs against its official site; Provisional means not yet. Shown on every firm and the compare page.