Trading & prop-firm glossary

Plain-English definitions of the rules and metrics that decide whether a funded account survives. Each links to the tool or firm page that uses it.

Consistency rule

A cap on how large any single day can be as a share of total profit, usually gating payouts.

Daily loss limit

The most you can lose in a single day before the firm ends your trading session.

Drawdown

The drop from an equity peak to a later trough, measured in currency or percent.

Drawdown freeze (lock at start)

When a trailing floor stops climbing once it reaches the starting balance.

End-of-day trailing drawdown

A trailing floor that only steps up at each daily close, never intraday.

Evaluation (challenge / combine)

The paid test phase a trader passes to earn a funded account.

Expectancy

The average result per trade, in R or currency, over many trades.

Funded account

A trading account where the firm's capital is at risk and you keep a share of the profit.

Intraday trailing drawdown

A trailing floor that follows every new equity high the moment it prints, including open trades.

Maximum Loss Limit (MLL)

Topstep's term for the trailing drawdown floor that ends the account if breached.

Minimum trading days

The fewest days you must trade before an evaluation can pass.

Overtrading

Taking more trades than your edge or plan justifies, usually eroding results.

Payout

A withdrawal of your profit share from a funded account, subject to the firm's rules.

Pip

The standard smallest price move in a forex pair, used to size and measure trades.

Position sizing

Choosing how many contracts or lots to trade based on the cash you'll risk.

Profit factor

Gross profit divided by gross loss: how many pounds you make per pound lost.

Profit target

The gain you must reach to pass an evaluation, set in currency or percent.

R-multiple

A trade's result expressed in units of the amount you risked (R).

Revenge trading

Trading to win back a loss rather than because a setup is present.

Risk of ruin

The probability that a string of losses takes your account below a survivable level.

Scaling plan

A firm's schedule for increasing your account size as you hit profit and consistency milestones.

Static drawdown

A fixed maximum-loss line measured from the starting balance that never trails your profit.

Tick value

The dollar change per one-tick move in a futures contract.

Tilt

An emotional state after losses where decision quality drops and risk-taking rises.

Trailing drawdown

A maximum-loss line that follows your equity peak up instead of staying fixed at the start.