Trading and prop firm glossary
Every term in this list has its own page, with a definition, a formula where one exists, a worked example and the practical effect on a funded or a live account.
Available terms
The glossary covers three fronts: the rules that end accounts (loss limits, valid days, consistency, news), the metrics that say whether a strategy holds up (expectancy, profit factor, Sharpe, TWR, MWR) and the execution decisions (risk per trade, position size, leverage, R:R).
Definitions are written for people who trade, not for people who study: where firms disagree, the text says so instead of presenting one variant as a universal rule.
- Daily drawdown
- Total drawdown
- Valid trading days
- Consistency rule
- Payout
- Evaluation phase
- Expectancy
- Sharpe ratio
- Kelly criterion
- TWR — time-weighted return
- MWR — money-weighted return
- Profit factor
- Risk per trade
- Leverage
- Position size
- Funded account
- Scaling plan
- News rule
- Risk-reward ratio
- MAE and MFE
- Funded account
- Breach
- Hard breach and soft breach
- Pip (forex)
- Lot (forex)
- Margin
- Swap
- Spread
- Margin call
- Slippage
- IRRF (withholding at source)
- Carnê-leão
- R-multiple