Glossary
The prop firm glossary, from the operator's side.
Evaluations, drawdown, payouts, platforms and payments, each defined in one sentence and then explained the way a founder needs it: what the term means for your rules, your risk and your website.
- Evaluations 17
- Risk and drawdown 11
- Payouts 7
- Platforms 14
- Running the business 9
- The website 8
- Marketing 3
- Compliance 11
- Risk and drawdownA-bookA-book describes trades the firm passes to a real market or liquidity provider; in prop firms, it usually means mirroring selected traders' positions with live capital.
- EvaluationsAccount resetAn account reset restores a prop firm evaluation account to its starting balance and rules, usually for a fee lower than a new challenge, after a breach or on request.
- Running the businessAffiliate programAn affiliate program pays partners such as creators, educators and comparison sites a commission on prop firm sales they refer, tracked by links and coupon codes.
- MarketingAI search and GEOGenerative engine optimization (GEO) is the practice of making content easy for AI assistants and AI search features to find, understand and cite accurately.
- ComplianceAMLAML (anti-money laundering) covers the checks and controls that stop a business being used to move illicit funds, including sanctions screening and source-of-funds review.
- ComplianceCFTCThe CFTC (Commodity Futures Trading Commission) is the US federal regulator of futures, options and swaps markets, relevant to prop firms offering futures or US-facing products.
- EvaluationsChallenge feeA challenge fee is the one-time price a trader pays to start a prop firm evaluation; some firms refund it with the first payout, others never do.
- Running the businessChargebackA chargeback is a card payment reversed by the cardholder's bank after a dispute, which costs a prop firm the sale, a fee and points against its chargeback ratio.
- EvaluationsConsistency ruleA consistency rule is a prop firm rule that limits how much of a trader's total profit can come from a single day or trade, to stop one outlier result from passing or paying out.
- MarketingConversion rateConversion rate is the share of visitors or sessions that complete a goal, such as buying an evaluation, measured per page, channel or step of checkout.
- EvaluationsCopy trading policyA copy trading policy sets whether a trader may copy trades between their own accounts, from others, or from signal services, and what limits apply.
- The websiteCore Web VitalsCore Web Vitals are Google's three field metrics for page experience: Largest Contentful Paint, Interaction to Next Paint and Cumulative Layout Shift.
- Running the businessCPACPA (cost per acquisition) is what a prop firm pays to win one paying customer, either as a fixed affiliate fee per sale or as total marketing spend divided by new buyers.
- PlatformscTradercTrader is Spotware's multi-asset trading platform for forex and CFDs, offered to brokers and prop firms with web, desktop and mobile apps and an open API.
- Risk and drawdownDaily loss limitA daily loss limit is the most a trader may lose in one trading day in a prop firm account, measured from a defined daily starting point; crossing it ends the account.
- PlatformsDXtradeDXtrade is Devexperts' white-label trading platform for forex, CFD and crypto, used by brokers and prop firms that want a branded web and mobile terminal.
- EvaluationsEA policyAn EA policy is a prop firm's rules on expert advisors, bots and other automated trading: which are allowed, which are banned, and how the firm checks.
- Risk and drawdownEnd-of-day drawdownAn end-of-day drawdown is a trailing maximum loss limit that updates only at the daily close, so intraday open profit does not raise the breach level.
- ComplianceESMAESMA (European Securities and Markets Authority) is the EU's securities markets authority, which coordinates national regulators and sets common standards for products such as CFDs.
- EvaluationsEvaluationAn evaluation is the paid, rule-bound test a prop firm sells, in which a trader must hit a profit target in a simulated account without breaking any risk rule.
- The websiteFAQ centerA prop firm FAQ center is the searchable help section that answers trader questions on rules, payouts, platforms, KYC and payments before they reach support.
- ComplianceFCA financial promotionA financial promotion is a communication inviting someone into investment activity; in the UK, the FCA regime restricts who may make them and how, which affects some prop marketing.
- Running the businessHigh-risk merchant accountA high-risk merchant account is a card processing account for businesses acquirers consider risky, such as prop firms, with higher fees, reserves and stricter monitoring.
- The websitehreflanghreflang is an HTML or sitemap annotation that tells search engines which language or regional version of a page to show to which users.
- Risk and drawdownHybrid modelA hybrid model is a prop firm or broker risk setup that keeps most flow internal (B-book) and routes selected traders or positions to a live market (A-book).
- MarketingLanding pageA landing page is a page built for one traffic source and one action, such as an affiliate's audience or a single program, rather than for general browsing.
- Risk and drawdownLiquidity providerA liquidity provider (LP) is a bank, prime broker or non-bank market maker that streams prices and fills orders, which a prop firm or broker connects to for live execution.
- The websitellms.txtllms.txt is a proposed plain-text file at a site's root that gives large language models a curated, markdown summary of the site and links to its most useful pages.
- Running the businessLTVLTV (lifetime value) is the total net revenue a prop firm earns from one trader across every evaluation, reset and add-on they buy, minus the rewards paid to them.
- ComplianceMarketing claimsMarketing claims are statements a prop firm makes to sell its programs, such as payout totals, pass rates, speed and income; each must be accurate, sourced and not misleading.
- PlatformsMatch-TraderMatch-Trader is Match-Trade Technologies' trading platform for forex and CFD brokers, with a prop firm product that bundles the platform with evaluation management.
- Risk and drawdownMaximum loss limitA maximum loss limit is the total drawdown a prop firm account may reach before it is closed, set as a static, trailing or end-of-day level below the starting balance.
- Running the businessMerchant category codeA merchant category code (MCC) is the four-digit code card networks use to classify what a merchant sells; it affects approval, fees and how issuers treat a prop firm's charges.
- PlatformsMetaTrader 4 and 5MetaTrader 4 and MetaTrader 5 are MetaQuotes' retail trading platforms, long the default for forex and CFD prop firms, with access now subject to MetaQuotes' own licensing decisions.
- ComplianceMiCAMiCA (Markets in Crypto-Assets Regulation) is the EU regulation for crypto-asset issuers and service providers, relevant to prop firms that take or pay in crypto or stablecoins.
- EvaluationsMinimum trading daysMinimum trading days is a prop firm rule requiring a trader to place trades on a set number of separate days before an evaluation phase can pass or a payout can be requested.
- Risk and drawdownMulti-accountingMulti-accounting is when one person controls several prop firm accounts under different identities, or several people coordinate trades, to bypass allocation and risk limits.
- EvaluationsNews trading ruleA news trading rule restricts opening or closing trades in a window around scheduled high-impact economic releases, usually only on simulated funded accounts.
- ComplianceNFAThe NFA (National Futures Association) is the US self-regulatory organization for the derivatives industry, whose members include brokers, introducing brokers and advisors.
- PlatformsNinjaTraderNinjaTrader is a futures trading platform and brokerage whose desktop charting and automation software is widely used by futures prop firm traders.
- EvaluationsPass ratePass rate is the share of prop firm evaluations that end in a pass rather than a breach, measured per phase or end to end; it drives payout liability.
- Running the businessPayment processorA payment processor moves card and other payments between a prop firm's checkout, the card networks and the acquiring bank that settles funds to the firm.
- PayoutsPayout capA payout cap limits how much a trader can withdraw in a single payout or period, often as a fixed amount or a percentage of the simulated account's starting balance.
- PayoutsPayout cycleA payout cycle is the schedule on which a prop firm lets funded traders request performance rewards, such as on demand, weekly, bi-weekly or monthly, plus its first-payout rule.
- PayoutsPayout proofPayout proof is evidence that a prop firm actually pays traders, such as payout certificates, transaction records or third-party verified data, shown on its site and socials.
- PayoutsPayout ratioPayout ratio is the share of a prop firm's revenue paid out to traders as performance rewards over a period, the key measure of whether the model is sustainable.
- PayoutsPayout reserveA payout reserve is cash a prop firm sets aside to cover expected and worst-case performance rewards, so it can keep paying traders through a bad month.
- PayoutsPerformance rewardA performance reward is the payment a prop firm makes to a trader based on results in a simulated funded account; it is the compliant name for a prop payout.
- The websitePricing tableA prop firm pricing table lists each program and account size with its fee and core rules side by side, so traders can compare and buy without opening the rules page.
- PayoutsProfit splitA profit split is the share of a simulated funded account's profit a prop firm pays the trader as a performance reward, with the rest retained by the firm.
- EvaluationsProfit targetA profit target is the gain, usually a percentage of starting balance, a trader must reach in a prop firm evaluation phase to pass it, without breaking any risk rule.
- PlatformsProjectXProjectX is a futures trading platform and back end from the Topstep group, built for prop trading, whose availability to other prop firms has changed over time.
- Running the businessProp firmA retail prop firm is a business that sells paid trading evaluations and pays performance rewards to traders who pass, usually within a simulated trading environment.
- EvaluationsProp firm challengeA prop firm challenge is the marketing name for a paid evaluation: a trader buys a simulated account and must meet a profit target under fixed risk rules to qualify.
- PlatformsProp firm CRMA prop firm CRM is the back-office system that holds traders, orders, accounts, KYC, payouts and affiliates, and connects checkout, platform and dashboard.
- ComplianceRestricted countriesRestricted countries are the jurisdictions a prop firm will not sell to or pay out to, because of sanctions, regulation, payment provider terms or platform licensing.
- ComplianceReview gatingReview gating is filtering which customers are invited to leave public reviews, for example only those who passed or were paid, so that ratings look better than reality.
- ComplianceRisk disclosureA risk disclosure is the statement a prop firm publishes explaining that trading is risky, that accounts are simulated where they are, and that results are not typical or assured.
- Risk and drawdownRisk engineA risk engine is the software that watches every prop firm account in real time, enforces loss limits and rules, and flags prohibited trading behavior.
- PlatformsRithmicRithmic is a futures market data and order routing provider that many futures prop firms use to connect traders' platforms to simulated and live accounts.
- Running the businessRolling reserveA rolling reserve is a percentage of each card settlement an acquirer holds back for a set period to cover future chargebacks and refunds, then releases on a rolling basis.
- The websiteRules pageA prop firm rules page is the single, canonical explanation of every evaluation and funded-stage rule, with definitions, worked examples and an update date.
- EvaluationsScaling planA scaling plan is a prop firm's published path for increasing a trader's simulated allocation, profit split or both after they meet defined performance conditions.
- The websiteSchema markupSchema markup is structured data, usually JSON-LD using schema.org types, that tells search engines and AI systems what a page describes, such as an organization or product.
- EvaluationsSimulated funded accountA simulated funded account is the post-evaluation account a prop firm gives a trader: trades run in a simulated environment and the firm pays performance rewards on results.
- Risk and drawdownStatic drawdownA static drawdown is a maximum loss limit fixed at a set level below the starting balance that never moves, however much profit the account makes.
- PlatformsTradeLockerTradeLocker is a newer web-first trading platform for forex and CFD brokers and prop firms, known for TradingView charting and a modern browser interface.
- PlatformsTrader dashboardA trader dashboard is the logged-in area where a prop firm's traders see their accounts, live rule status, breach levels, certificates and payout requests.
- PlatformsTrading platformA trading platform is the software traders use to place orders and see positions; for a prop firm, it also supplies the account data the risk engine and dashboard rely on.
- PlatformsTradovateTradovate is a cloud-based futures trading platform and brokerage, part of the NinjaTrader group, used by futures prop firms to provide simulated and live accounts.
- Risk and drawdownTrailing drawdownA trailing drawdown is a maximum loss limit that moves up as the account reaches new highs, so the breach level follows the trader's peak rather than staying fixed.
- The websiteTrust centerA trust center is a website section that gathers a prop firm's company details, payout proof, policies, disclosures and review links in one place for traders and partners.
- EvaluationsTwo-step challengeA two-step challenge is an evaluation split into two phases, usually a higher profit target first and a lower one in a verification phase, before simulated funding.
- EvaluationsWeekend holding ruleA weekend holding rule decides whether a trader may keep positions open over the weekend market close, and what happens to positions that are still open.
- PlatformsWhite labelA white label is a technology product another company builds and runs that a prop firm sells under its own brand, such as a platform, challenge engine or a whole firm.
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