Prop trading glossary: 46 terms explained

A one-time fee some prop firms charge when you pass an evaluation and activate the funded account, usually in exchange for a lower evaluation price.

A loss limit measured on closed trades only. Open profit and loss does not count until positions are closed.

A consistency rule that caps how much of your total profit may come from your single best day.

Software that places orders automatically from predefined rules or signals. Prop firms differ widely on whether bots are allowed.

Touching a rule that ends the account, typically the maximum loss limit and on some plans the daily loss limit.

A broker contract that pays the price difference of an underlying asset. Forex prop firms usually offer crypto as CFDs with low leverage.

Another name for the evaluation: the paid test in which a trader must reach a profit target without breaking the risk rules.

A rule that limits the share of profit from one day. On QATS Crypto evaluations the best day may be at most 40% of total profit.

Mirroring trades from one account or signal provider into others. Copying signals across accounts owned by different people is almost always prohibited by prop firms.

The most an account may lose in one trading day. On QATS Crypto it is 4% of the starting balance.

The decline from a peak in balance or equity. Prop firms set drawdown limits that end or pause the account when reached.

A maximum-loss floor that moves up only at the daily close, based on the closing balance, so intraday swings do not raise it.

A loss limit that includes open profit and loss, so a deep open drawdown can breach the account before the trade is closed.

The assessment stage in which a trader proves a repeatable process under published rules before receiving a funded account.

An automated trading program for MetaTrader. Many forex prop firms allow EAs with conditions.

The account a trader receives after passing an evaluation. At most prop firms, including QATS, the initial funded stage is simulated and pays performance-based payouts.

A periodic payment between long and short holders of a perpetual future that keeps its price close to the spot index.

Holding offsetting positions to reduce exposure. Hedging the same instrument across your own accounts is commonly prohibited.

A program that skips the evaluation and starts on a funded account, usually at a higher price and with tighter limits.

A maximum-loss floor that follows the highest equity in real time, including unrealised profit.

Identity verification required before payouts, typically a government ID and a liveness check.

The ratio between position size and the capital behind it. QATS Crypto allows up to 20× on BTC and ETH, 10× on large caps and 5× on others.

The forced closing of a leveraged position by an exchange when margin runs out. On a prop account the loss limits are reached long before.

An exchange reference price derived from the spot index, used for liquidations and often for unrealised profit and loss on perpetuals.

The overall loss limit of an account. On QATS Crypto it is 6% of the starting balance, trailing at end of day until it reaches the starting balance.

The number of days with at least one trade required before an evaluation can pass. QATS evaluations require 2.

An evaluation with a single profit target before the funded stage.

A payment of the trader’s share of profits from a funded account, subject to eligibility rules and verification.

The maximum amount that can be requested in one payout. QATS caps the first payout at the account’s loss limit.

A futures contract with no expiry that tracks its underlying through funding payments. The most traded crypto derivative.

TradingView’s programming language for indicators and strategies. Pine strategies can send alerts to a webhook.

Choosing trade size from account balance, risk per trade and stop distance.

The share of funded-account profit paid to the trader. QATS uses an 80% split.

The profit an evaluation requires to pass. QATS Crypto targets are 10% of the starting balance.

A company that evaluates traders and gives those who pass a funded account with a share of the profits.

Restarting a breached evaluation with the same rules. QATS monthly plans add a free reset to each paid renewal; a $10K one-time Crypto reset is $75.

The amount you lose if a trade hits its stop, usually expressed as a percentage of the account.

A free practice account with virtual funds. QATS offers a sandbox whose orders pass the same server-side risk checks as a paid account, under a fixed test rule set.

A program that increases a funded account’s size or profit split after consistent performance.

An account that trades on live market data without placing orders on a real exchange. Most prop evaluations are simulated.

The difference between the expected and the executed price, common in fast markets and with stop-market orders.

A loss floor fixed at a set distance below the starting balance that never moves.

A programmatic interface for placing orders and reading account data. QATS provides a Trader API for prop accounts.

An evaluation with two phases and two profit targets before the funded stage.

A URL that receives automated messages. TradingView alerts can send orders to a prop account through a webhook.

A trading day that closes above a minimum profit. QATS payouts require 5 winning days.