Prop Trading Glossary
Prop trading has its own working vocabulary, and firms don’t always explain it the way it actually functions. This glossary is written from the operator’s side: what each term means, and why the rule or structure behind it exists in the first place.
General
- Proprietary Trading Firm (Prop Firm)
- Prop Firm Challenge (Evaluation)
- One-Step Challenge
- Two-Step Challenge
- Instant Funding
- Funded Account
- Funded Trader
- Simulated Account
- Live Account
- Profit Split
- Payout
- Payout Cycle
- Scaling Plan
- Reset
- Consistency Rule
- Minimum Trading Days
- News Trading Restriction
- Weekend Holding
- Expert Advisor (EA)
- Copy Trading Restriction
Risk & Drawdown
- Drawdown
- Static Drawdown (Max Drawdown)
- Trailing Drawdown
- EOD (End of Day) Trailing Drawdown
- Intraday Trailing Drawdown
- Daily Loss Limit
- Breach
- Profit Target
- Lot Size Restriction
- Leverage
- Hedging Restriction
- Martingale Restriction
CFD-Specific
- CFD (Contract for Difference)
- Spread
- Swap (Overnight Fee)
- MT4/MT5
- cTrader
- Liquidity Provider (LP)
- A-Book / B-Book
- Slippage
Futures-Specific
- Futures Contract
- Micro Futures Contract
- Tick Value
- Combine
- Funded Futures Account
- Rithmic / Tradovate
- RTH / ETH
Trust & Regulatory
- CFTC (Commodity Futures Trading Commission)
- NFA (National Futures Association)
- FCA (Financial Conduct Authority)
- ASIC (Australian Securities and Investments Commission)
- Regulatory Grey Zone
- KYC (Know Your Customer)
- Payout Proof
- Payout Pause