A scaling parameter that determines the ratio of full contracts to micro contracts a trader is permitted to use.
Prop firms often restrict how traders scale their contract sizes. Understanding the full to micro ratio allows traders to size their positions correctly and comply with the firm’s risk rules.
If a trader is allowed a 1:10 full-to-micro ratio, they can trade either 1 full contract (ES) or 10 micro contracts (MES) within the same risk limits. This flexibility helps traders manage their risk based on volatility.
The number of phases a trader must complete to qualify for a funded account. Each phase typically includes meeting profit targets while adhering to risk rules.
The initial amount of capital allocated to a trading account in an evaluation or funded account.
The specific profit amount a trader must achieve to pass an evaluation or progress to a higher account level.
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.