Rules Desk · Glossary
Prop firm terms, in plain words
25 words you'll meet in prop firm rules, one line each. Tap a link to see it worked out with numbers.
By Ruben Roman · Last checked 26 September 2026 · How we check the maths
Firms word these differently. Your firm's own rules page always wins.
The account
Evaluation (challenge). A paid test account. Reach the profit target without breaking a rule and the firm offers you a funded account. Evaluation simulator →
Profit target. The profit you need to pass the evaluation. At some firms a consistency rule can raise it. Why did my target go up? →
Funded account. The account you trade after you pass. Its own rules and payout rules apply, and they can differ from the evaluation's. Why payouts get refused →
Account reset. Paying to restart an evaluation from the beginning after it closes. It counts toward what an attempt really costs. Cost calculator →
Drawdown
Max drawdown (max loss). How far your balance can fall before the account closes. Think of it as a line under your balance. Daily limit vs max drawdown →
Intraday trailing drawdown. The line follows your highest balance, including open profit during a trade. A winner that gives back profit still moves the line up. Intraday vs end-of-day →
End-of-day (EOD) trailing drawdown. The line moves up only from your balance at the end of each day, not during trades. Intraday vs end-of-day →
Static drawdown. The line stays in one place below your starting balance. It never moves up. Rule decoder →
Drawdown lock. The point where a trailing line stops moving up, often at your starting balance. Some firms lock it a little above. What a lock means →
Room. How far your balance is above the line right now. It's the most you can lose before the account closes. Drawdown runway calculator →
Daily and payout rules
Daily loss limit. The most you can lose in one day. A soft limit ends your day; a hard limit can end the account. Soft vs hard →
Daily reset. When the firm's trading day starts again. It's often tied to the futures market's daily break (4 to 5 PM Chicago time), but check your firm's stated time. When the daily limit resets →
Consistency rule. A cap on how much of your total profit can come from your best day. Consistency calculator →
Trading day (qualifying day). A day that counts toward the minimum days to pass or to be paid. Some firms only count days with a minimum profit. Accounts and trading days →
Payout. Taking profit out of a funded account. The firm's payout rules decide when, and how much. Payout-day check →
Buffer. Profit some firms require you to leave in the account when you take a payout. Payout-day check →
News rule. A limit on trading around scheduled economic releases. Firms handle it in different ways. News rules →
Scaling plan. A contract limit that grows as your balance grows, so early on you may be allowed fewer contracts than the account's maximum. Scaling plans →
Contracts and numbers
Contract. One unit of a futures product. Trading 2 contracts means twice the gain or loss of 1. Contracts on a $50k account →
Micro and mini. A micro is one-tenth the size of its mini: MNQ is a tenth of NQ, MES a tenth of ES. Position size calculator →
Point value. What one point of price movement is worth per contract: MNQ $2, NQ $20, MES $5, ES $50. Position size calculator →
Tick. The smallest price move. On MNQ a tick is 0.25 points, worth $0.50 per contract. Position size calculator →
Risk per trade. What you lose if your stop is hit: stop in points × point value × contracts. Position size calculator →
Win rate range. The range your true win rate is likely in. With few trades it's wide, so one good week proves little. What your trades prove →
Break-even win rate. The win rate where you neither make nor lose money: average loss ÷ (average win + average loss). What your trades prove →
Educational material only. Not investment advice. Trading futures involves substantial risk of loss and most people who try it lose money. Check your account rules with your firm; they change.
