Every term, in plain English.

Also called Proprietary trading firm, Funded trader program

A company that sells evaluations and pays traders who pass a share of the profits they make. Short for proprietary trading firm.

What is a prop firmTypes of prop firms

Also called Challenge, Combine, Assessment

The paid trial you trade to qualify for a funded account. You must hit a profit target without breaking any rule.

How evaluations work

Also called Performance account, PA, Express funded, Sim funded

The account you trade after you pass. Profits on it can be paid out to you. At most futures firms it is still a simulated account.

Simulated vs live funded accounts

Also called Sim account, Demo account

An account that uses real market prices but never sends orders to the exchange. The firm pays you based on its results.

Simulated vs live funded accounts

Also called Live funded

An account whose orders reach the real market. Some firms move their best traders to one after a run of payouts.

Simulated vs live funded accounts

Also called Account tier

The starting balance of a program, such as 25K, 50K or 150K. Bigger sizes cost more and allow more contracts and a larger drawdown.

Choosing an account sizeEvery 50K program

Also called 1-step, 2-step

An evaluation with one phase or two. Two-step programs have two targets to hit, usually with a lower price or looser rules in exchange.

One-step vs two-step

Also called Straight to funded, Direct funding

A program that skips the evaluation and starts you on a funded account, usually for a higher fee and with tighter rules.

Instant funding explainedInstant funding firms

A firm that funds futures trading, usually index futures like NQ and ES, on platforms such as Rithmic or Tradovate.

Futures prop firms

Also called FX prop firm, CFD prop firm

A firm that funds currency, metals and index CFD trading, usually on MetaTrader, cTrader or DXtrade.

Forex prop firms

A firm that funds cryptocurrency trading, usually perpetual futures or CFDs on Bitcoin, Ether and other coins.

Crypto prop firms

Also called Equities prop firm

A firm that funds trading in individual shares and ETFs.

Stock prop firms

Also called Trade copier, Group trading

Using software to copy the trades from one account to others at the same time. Many firms allow it across your own accounts and ban it across other people's.

Also called Max accounts

The most evaluations or funded accounts one person can hold at a firm at the same time.

Also called Identity verification

Know your customer: the identity check a firm runs before your first payout, usually an ID and proof of address.

How payouts work

Also called Target

The profit you must reach to pass an evaluation, set in dollars or as a percent of the account. In futures it is often around 6%.

Profit targets

Also called Min days

The fewest days you must trade before you can pass an evaluation or request a payout.

Minimum trading days

Also called Profitable day, Qualifying day

A day that closes above a set profit amount. Some payout rules count only winning days.

Also called Best day rule

A cap on how much of your total profit can come from one day, such as 30% or 50%. It stops one lucky day from passing the account.

The consistency ruleFirms with no consistency rule

Also called Max contracts, Position limit

The largest position you are allowed to hold, counted in contracts (or lots). Micros usually count as one-tenth of a mini.

Contract limitsPosition size

Also called Scaling rule

A rule that starts you on fewer contracts and raises your limit as your profit grows.

Contract limits

Also called News trading rule

A rule about trading around scheduled economic releases, such as a ban on trades a few minutes before and after.

News trading rules

Also called Flat by close

Whether you may keep a position open past the daily close or over the weekend. Most futures firms require you to be flat before the close.

Also called EA rule, Algo rule

What a firm allows for bots, scripts and trade management tools. Many ban fully automated trading on funded accounts.

A ban on holding opposite positions in the same or related markets, often across accounts.

A rule that closes an account if it is not traded for a set number of days.

Also called Reset fee

Restarting an evaluation from the beginning after you break a rule, usually for a fee lower than buying a new one.

Reset fees

Also called Breach, Violation

Breaking any account rule. A hard breach ends the account; a soft breach only stops trading for the day or fails the payout.

Why payouts get denied

Also called Max loss, Maximum drawdown, Trailing threshold

How far your balance can fall before the account ends. It is the rule that ends the most accounts.

Drawdown rules

Also called EOD drawdown, EOD trailing

A drawdown limit that only moves up with your balance at the end of each day, so open profit during the day does not raise it.

End-of-day drawdownFirms with EOD drawdown

Also called Real-time trailing, Live trailing

A drawdown limit that rises with your highest balance during the day, including open profit you have not taken.

Intraday trailing drawdown

Also called Fixed drawdown

A drawdown limit that never moves: a fixed balance you must stay above.

Drawdown rules

Also called Trail stop, Threshold lock

The point where a trailing drawdown stops rising, often once it reaches your starting balance plus a small amount.

Drawdown rules

Also called DLL, Daily drawdown

The most you can lose in one day. A soft limit stops trading until tomorrow; a hard limit ends the account.

The daily loss limitFirms with no daily loss limit

Also called Auto-liquidation

When the platform closes your positions automatically because you hit a loss limit.

Also called Dollar risk

How much you are willing to lose if one trade hits its stop, in dollars. A common plan keeps it to about a tenth of the drawdown or less.

Build your plan

Also called Personal loss limit

Your own limit for the day, set tighter than the firm's, such as two losses. When you hit it, you stop.

Build your plan

Also called Withdrawal

A withdrawal of your share of the profit from a funded account.

How payouts work

Also called Payout split, Revenue share

Your share of each payout, such as 80% or 90%. Some firms pay 100% of the first part and split the rest.

Profit splits90% split firms

Also called Safety net, Cushion

Profit you must keep above your starting balance before you can withdraw anything.

Payout buffers

Also called Payout cycle

How often you can request a payout: daily, weekly, every 14 days or monthly.

Payout frequencyDaily payout firms

Also called Payout cap

The smallest amount you can request, and the most you can take in one payout, often with a cap on the first few.

How payouts work

When a firm refuses a payout, usually for a rule it says you broke. The firm's own rules decide.

Why payouts get denied

The contract most firms sign with funded traders before the first payout. Payouts are paid to you as a contractor, not as wages.

Payout methodsPayouts and taxes

Also called Challenge fee, Subscription

The price of an evaluation, paid once or as a monthly subscription until you pass.

One-time vs monthlyOne-time fee firms

Also called Funded account fee

A one-time charge some firms take when you pass, before the funded account starts.

Activation feesNo activation fee firms

Also called Market data fee

A monthly charge for live futures market data on a funded account, passed on from the exchange.

Data fees

Also called Total cost

Everything you pay across every attempt until your first payout: evaluations, resets, activation and data fees.

What you keep from a payout after the split and any fees.

Also called Promo code, Coupon

A code that lowers the price of an evaluation. Firms run them often; the price you pay is what counts.

Today's codes

Also called Futures

An agreement to buy or sell something at a set price on a future date. Traders use them to trade an index, metal or commodity without owning it.

Also called E-mini, Micro E-mini

Futures sizes. A micro is one-tenth of a mini: MNQ is one-tenth of NQ, MES one-tenth of ES.

Micro vs mini contracts

Also called Tick size

The smallest price move a contract can make. On ES and NQ it is 0.25 of a point.

What one tick is worth on one contract: $12.50 on ES, $1.25 on MES, $5.00 on NQ, $0.50 on MNQ.

Also called Dollars per point, Multiplier

What a one-point move is worth on one contract: $50 on ES, $5 on MES, $20 on NQ, $2 on MNQ, $5 on YM, $0.50 on MYM.

Size it in the plan builder

Also called Nasdaq futures

Futures on the Nasdaq-100 index: NQ (the mini, $20 a point) and MNQ (the micro, $2 a point). Known for big, fast moves.

Also called S&P futures

Futures on the S&P 500 index: ES (the mini, $50 a point) and MES (the micro, $5 a point). The most traded index futures.

Also called Dow, Russell, crude, gold futures

Other common futures: YM (Dow, $5 a point), RTY (Russell 2000, $50 a point), CL (crude oil, $1,000 per $1) and GC (gold, $100 per $1). Each has a micro.

Also called Expiration, Front month, The roll

Futures expire. Index futures expire every quarter (March, June, September, December), and traders move to the next contract about a week before, called the roll.

Also called Day trading margin

The money a broker holds while a futures position is open. At a prop firm, your contract limit replaces margin as the thing that caps your size.

Controlling a large position with a small amount of money. One MNQ is worth $2 times the Nasdaq-100 level, so at 21,000 it moves like $42,000 of the index.

How easily you can buy or sell without moving the price. Liquid markets have tight spreads and plenty of orders at each price.

How much and how fast price moves. ATR is one way to measure it.

ATR

Also called Bid-ask spread

The gap between the best price to buy (ask) and the best price to sell (bid).

Getting filled at a worse price than you expected, common with market and stop orders in fast moves.

Also called Round turn, RT

The fee charged on each contract you trade, per side. Prop firms charge it on evaluation and funded accounts too.

Also called Pips, Lots

Forex units. A pip is the fourth decimal place on most currency pairs; a standard lot is 100,000 units of the base currency.

Contract for difference: a product that tracks a market's price without owning it. Forex prop firms usually use CFDs on indices, metals and oil.

The software you place trades from, such as NinjaTrader, Tradovate or TradingView. Each firm supports only some of them.

Trading software by firm

Also called Connection

The service that sends prices to your platform. In futures prop trading this is usually Rithmic, Tradovate or CQG.

A futures data and order routing service used by many prop firms. Platforms such as NinjaTrader, Quantower and ATAS connect through it.

Prop firms for Rithmic

A futures broker and web platform that many prop firms use. It also connects to TradingView.

Prop firms for Tradovate

A futures charting and trading platform, popular with prop traders for its order tools and indicators.

Prop firms for NinjaTrader

A charting platform that runs in the browser. Some prop firms let you trade from it through a connected broker.

Prop firms for TradingView

Also called Depth of market, Level 2, Order book, Price ladder

Depth of market: a ladder showing resting buy and sell orders at each price. Also called the order book or Level 2.

Also called Footprint chart

Reading the actual buying and selling, trade by trade, rather than only the candles. Footprint charts show it inside each candle.

Also called Repainting, No repaint

When an indicator or signal changes or disappears after the fact, so it looks better on the chart than it ever was live. Every strategy here is checked on closed candles so it never repaints.

How we prevent it

Also called Candle close, Confirmed candle

A candle whose time is over, so its open, high, low and close are final. Rules checked only on closed candles cannot change their answer.

An order to buy or sell right now at the best available price. It always fills, but the price is not guaranteed.

An order to buy at or below a price, or sell at or above it. You choose the price, but it may not fill.

Also called Stop market

An order that becomes a market order when price reaches a level. Used to enter breakouts or to exit a losing trade.

Also called Stop, SL

The exit that closes a losing trade at a price you chose before entering: where the idea is wrong.

Also called Target, TP

The exit that closes a winning trade at a target price.

Also called OCO, One cancels other, ATM strategy

An entry sent with a stop-loss and a take profit attached. When one exit fills, the other is cancelled.

A stop that moves with price as the trade goes your way, locking in some profit.

Also called BE

Moving your stop to your entry price so the trade can no longer lose (before costs).

Also called Partials, Partial profit

Adding to a position in steps, or taking profit in steps, rather than all at once.

Also called Buy and sell

Long means you profit if price rises; short means you profit if it falls. In futures, going short is as simple as going long.

Having no open position.

Also called R, Risk unit

Profit or loss measured in units of what you risked. Risk $200 and make $400: that is +2R. Hit your stop: −1R.

Also called Reward to risk, RR

How far the target is compared with the stop. A 2:1 trade aims to make twice what it risks.

Also called Size

How many contracts you trade. Set it from your dollar risk and your stop size, not from how sure you feel.

Position sizePlan builder

Also called Hit rate, Strike rate

The share of trades that hit their target. On its own it says little; a 40% win rate can make money with 2R targets.

Also called Edge

What a strategy makes per trade on average, in R: (win rate × average win) minus (loss rate × average loss).

Also called MA, SMA

The average price over the last set number of candles, drawn as a line. It smooths out noise and shows direction.

Also called Exponential moving average

Exponential moving average: a moving average that gives more weight to recent candles, so it turns faster. Common lengths are 9, 20, 21, 50 and 200.

9/21 EMA crossoverEMA ribbon pullback

Also called Volume weighted average price

Volume-weighted average price: the average price paid today, weighted by volume. Many day traders treat it as the day's fair price.

VWAP reclaim

Also called AVWAP

A VWAP that starts from a chosen candle, such as a big swing low or a news candle, instead of the start of the day.

Watch it on the live chart

Also called Average true range

Average true range: how far price typically moves in one candle, averaged over 14 candles. Used to size stops to the market's current pace.

Also called Relative strength index

Relative strength index: a 0 to 100 gauge of recent gains against losses. Above 70 is often called overbought, below 30 oversold.

Watch it on the live chart

Moving average convergence divergence: the gap between the 12 and 26 EMAs, with a 9-period signal line and a histogram of the difference.

MACD crossoverMACD zero line cross

Also called Stoch, %K and %D

An oscillator showing where the close sits within the recent high-low range, from 0 to 100. Crosses of its two lines are read as turns.

Watch it on the live chart

Also called BB

A 20-period average with a band two standard deviations above and below. The bands widen when price is volatile and narrow when it is quiet.

Bollinger band fadeBollinger band breakout

Also called KC

A band set a multiple of ATR either side of an EMA. Smoother than Bollinger bands.

Keltner channel breakoutKeltner channel fade

Also called TTM squeeze, Volatility squeeze

When Bollinger bands narrow inside the Keltner channel: volatility is unusually low, and a bigger move often follows.

Watch it on the live chart

The highest high and lowest low of the last set number of candles, such as 20. Made famous by the Turtle Traders.

Watch it on the live chart

A line set a multiple of ATR from price that flips sides when the trend changes. Green below price in an uptrend, red above in a downtrend.

Watch it on the live chart

Also called SAR, Stop and reverse

Dots that trail price and speed up as the trend continues. When price crosses them, they flip to the other side.

Watch it on the live chart

Also called Ichimoku Kinko Hyo, Kumo

A Japanese indicator with a shaded cloud projected ahead of price, plus conversion and base lines. Price above the cloud is read as an uptrend.

Watch it on the live chart

How many contracts traded during a candle. Big moves on high volume are taken more seriously than moves on low volume.

Volume climax reversal

Also called Market profile

A sideways histogram showing how much traded at each price over a period, rather than over time.

Also called Point of control

Point of control: the price where the most volume traded in a session. It often acts like a magnet.

Watch it on the live chart

Also called VAH, VAL, Value area high, Value area low

The price range where about 70% of a session's volume traded, bounded by the value area high (VAH) and value area low (VAL).

Value area rejectionThe 80% rule

When an oscillator such as RSI or stochastic is at an extreme. It means price has moved fast, not that it must turn.

Watch it on the live chart

Also called Cross

When one line crosses another, such as a fast EMA crossing a slow one. Counted on the close so it cannot repaint.

Watch it on the live chart

The 50-period average crossing above (golden) or below (death) the 200-period average. Slow, widely watched trend signals.

Watch it on the live chart

Also called S/R

Prices where buying (support) or selling (resistance) has stepped in before. Old resistance often becomes new support after a break.

Watch it on the live chart

A run of higher highs and higher lows (uptrend) or lower highs and lower lows (downtrend).

Watch it on the live chart

Also called Consolidation, Chop, Balance

Price moving sideways between a high and a low, with no clear trend.

Also called Pivot, Fractal

A turning point: a high with lower highs either side, or a low with higher lows either side. Here a swing needs 3 closed candles on each side.

Also called Market structure

Higher high, higher low, lower high, lower low: shorthand for how each swing compares with the last. The live chart labels them on structure strategies.

Also called BOS

A close beyond the last swing high in an uptrend (or swing low in a downtrend): the trend is continuing.

Watch it on the live chart

Also called MSS, Change of character, CHoCH

The first close beyond the last swing that held the trend: the first sign the trend may be turning.

Watch it on the live chart

Also called Retracement, Dip

A short move against the trend before it continues. Many entries wait for one instead of chasing.

Watch it on the live chart

Price closing outside a range, a level or a pattern.

Watch it on the live chart

Price coming back to a level it just broke, to see if it now holds from the other side.

Watch it on the live chart

Also called Fakeout, False breakout, Bull trap, Bear trap

A breakout that closes back inside the range. Traders who chased it are trapped, which can push price the other way.

Watch it on the live chart

A change of direction: an uptrend turning down or a downtrend turning up.

When price makes a new high or low but an oscillator such as RSI or MACD does not. The push behind the move is weaker.

RSI divergenceMACD divergence

Also called Resting liquidity, Buy-side and sell-side liquidity

In price action, the stop orders resting just above old highs and below old lows. Price often runs those levels before turning.

Also called Stop run, Stop hunt, Liquidity grab

Price trades just past an obvious high or low, triggers the stops there, then closes back inside.

Watch it on the live chart

Also called EQH, EQL

Two or more highs (or lows) at almost the same price. They draw attention, and stops, which makes them common sweep targets.

Also called Impulse

A strong, fast move in one direction, usually one or a few large candles, that shows real intent.

Also called FVG, Imbalance

A three-candle pattern where the middle candle moves so fast that the first and third candles' wicks do not overlap. Price often comes back to fill part of it.

Watch it on the live chart

Also called IFVG, Inversion FVG

A fair value gap that price closes straight through. The zone often flips, so old support acts as resistance.

Watch it on the live chart

Also called OB

The last opposite-colour candle before a strong move. Traders watch it as a zone where price may react again.

Watch it on the live chart

Also called Equilibrium

The upper half of a range (premium, expensive) and the lower half (discount, cheap), split at the midpoint.

Watch it on the live chart

Also called OTE

A pullback into the 62% to 79% retracement of a move, a zone many smart money traders look for entries in.

Watch it on the live chart

Also called Opening gap

A jump between one session's close and the next session's open, leaving prices that never traded.

Gap fillGap and go

Also called Big figure, Psychological level

Prices such as 21,000 or 5,500 that people notice, so orders cluster there.

Watch it on the live chart

A price that has mattered before and is likely to matter again: yesterday's high or low, VWAP, a recent swing.

Also called Bull flag, Bear flag, Pennant

A sharp move (the pole) followed by a small, orderly drift against it (the flag), often before the move continues.

Watch it on the live chart

Also called Wedge

Price squeezing between a flat level and a sloping trendline, or two sloping lines, until one side breaks.

Watch it on the live chart

Also called M top, W bottom

Price testing the same high (or low) twice and failing to break it. A close through the middle confirms the turn.

Watch it on the live chart

Also called H&S, Inverse head and shoulders

Three peaks, the middle one highest, with a neckline under them. A close through the neckline signals the trend has turned.

Watch it on the live chart

Also called Candle, OHLC

A bar showing a period's open, high, low and close. The body runs from open to close; the wicks show the high and low.

Also called Shadow, Tail

The thin line above or below a candle's body, showing prices that traded but did not hold by the close.

A candle that opens and closes at almost the same price: neither side won that period.

Also called Bullish engulfing, Bearish engulfing

A candle whose body completely covers the previous candle's body, in the opposite colour.

Watch it on the live chart

Also called Hammer, Shooting star, Rejection candle

A candle with a long wick on one side and a small body at the other end: price was pushed away hard.

Watch it on the live chart

Also called Mother bar

A candle whose high and low both sit inside the previous candle's range. The previous candle is called the mother bar.

Watch it on the live chart

Also called Outside day

A candle that trades above the previous high and below the previous low.

Watch it on the live chart

Also called Narrow range 7

The narrowest-range candle of the last seven. A quiet candle that often comes before a bigger move.

Watch it on the live chart

A three-candle turn: a big candle, a small one, then a big one the other way that closes well into the first.

Watch it on the live chart

Three strong candles in a row in the same direction, each closing near its extreme.

Watch it on the live chart

Two candles in a row with matching highs (top) or matching lows (bottom), one each colour.

Watch it on the live chart

Also called Reversal bar

A candle that makes a new low and then closes above the previous candle's high, or the reverse at a high.

Watch it on the live chart

A candle with a big body and almost no wicks: one side was in control from open to close.

A wide, strong candle that starts a move. In a three-bar play, a small pause follows it before the breakout.

Watch it on the live chart

Also called RTH, Cash session, Day session

The main US stock market session, 9:30 to 16:00 New York time. Index futures are busiest then.

Also called ETH, Overnight session, Electronic trading hours

CME's electronic market, where index futures trade almost 24 hours: Sunday to Friday, 18:00 to 17:00 New York time, with an hour's break each day.

Also called Tokyo session

The overnight hours while Asian markets are open, roughly 18:00 to 3:00 New York time. Usually quieter.

Watch it on the live chart

Also called London open

European trading hours, from about 3:00 New York time. London's open often brings the first real move of the day.

Watch it on the live chart

Also called NY open, The open

9:30 New York time, when the US stock market opens. The busiest, fastest part of the day for index futures.

Watch it on the live chart

Also called OR, ORB

The high and low of the first few minutes after the open, often 5, 15 or 30 minutes.

Watch it on the live chart

Also called IB

The high and low of the first hour of the regular session, 9:30 to 10:30 New York time.

Watch it on the live chart

Also called ONH, ONL, Globex high and low

The highest and lowest prices traded before the regular session opens.

Watch it on the live chart

A window when moves are more likely, such as the London open or the New York morning. A smart money term.

Watch it on the live chart

A one-hour window, 10:00 to 11:00 New York time, used to look for fair value gap setups.

Watch it on the live chart

A false move early in a session that runs one way, takes out stops, then reverses into the real move.

Watch it on the live chart

Also called News, Red folder news

The schedule of reports such as CPI, jobs numbers and Fed decisions. Prices can jump the moment they come out.

Calendar

Also called Midday

Roughly 12:00 to 13:30 New York time, when volume usually drops and moves get choppy.

Also called Plan

Your written rules: which setup, which market, how much you risk, when you stop. The plan decides before the trade, not during it.

Build your plan

Also called Setup, System

A set of rules for when to enter, where to place the stop and where to take profit. Each one here answers four questions: the level, the trigger, the stop and the target.

All strategies

Also called Entry signal

The exact candle close that says the setup is on. Before the trigger, there is nothing to do.

Evidence that adds to a setup, such as a close back above a level. A confirmation is evidence, not a promise.

The price that proves the idea wrong. That is where the stop goes.

Also called Pre-trade checklist

A short list you tick before every trade. If any box is empty, you skip the trade.

The checklist

Also called Backtesting

Testing a strategy on past prices to see how its rules would have done. Only honest if the rules use closed candles and never peek ahead.

Also called Paper trading

Trading a strategy in real time on a demo or small size before trusting it with a bigger account.

Also called Journal

A record of every trade: the setup, the reason, the result in R, and what you would change.

Taking trades that are not in your plan, usually from boredom or to win back a loss.

Also called Tilt

Trading bigger or faster right after a loss to get the money back. The fastest way to hit a daily loss limit.

Fear of missing out: chasing a move after it has already gone, without a setup.

A repeatable reason a strategy should make money over many trades. One trade proves nothing either way.

Expectancy