The profit cushion above the starting balance, which traders must maintain to stay compliant or qualify for payouts.
Some prop firms require traders to maintain a minimum balance buffer before withdrawing profits. This ensures traders still have risk capital available after taking payouts.
A trader reaches $105,000 in a $100,000 funded account. If their firm requires a $2,000 balance buffer before withdrawals, the trader can only withdraw $3,000, keeping the remaining $2,000 in the account.
The initial amount of capital allocated to a trading account in an evaluation or funded account.
The maximum amount a trader is allowed to lose in a single trading day. Exceeding this limit typically disqualifies the trader. There are different types of loss limits, so it is important to understand the type that applies to a chosen plan.
The maximum permissible loss from the starting balance or peak balance. Breaching the drawdown limit ends the evaluation or funded account.
A scaling parameter that determines the ratio of full contracts to micro contracts a trader is permitted to use.
A requirement ensuring traders generate profits steadily over time rather than relying on a single large winning day.