Glossary
Prop-firm trading glossary: the terms, and what they mean in Propcockpit
The words a funded trader meets - daily loss, trailing drawdown, consistency, the high-water mark - defined the way the firms use them, and the words this product uses beside them, defined the way the product does.
Prop-firm trading
- Prop firmA company that lets a trader operate its capital after an evaluation, in return for a share of the profit and inside a set of loss rules.
- EvaluationThe phase or phases a trader passes to be funded: a profit target to reach without crossing the firm's loss lines.
- Maximum daily lossThe most an account may lose in one of the firm's days, floating positions included, before the evaluation or the funded account ends.
- Maximum lossThe most an account may ever be below its starting size. Crossing it ends the account; it does not reset.
- Trailing drawdownA maximum loss measured down from the account's highest point rather than from its starting size, so the floor rises with the account.
- High-water markThe highest an account has been, from which a trailing drawdown is measured.
- Profit targetThe gain, as a share of the initial account size, that completes an evaluation phase.
- Minimum trading daysThe number of separate days on which a trade must be placed before a phase can be passed.
- Consistency ruleA cap on how large one day's profit may be, as a share of the firm's measure of profit, so a pass cannot rest on one trade.
- Daily resetThe moment the firm's day begins, when the daily loss limit is measured afresh.
- Risk per tradeWhat one trade loses if its stop is hit, as a share of the account.
- Position sizeThe volume of a trade, chosen so that the stop loss costs the intended risk per trade and no more.
- Stop lossAn order resting at the broker to close a position at a price where the trade is wrong.
- Equity and balanceBalance is what the account holds with everything closed; equity is balance plus the open positions' running result.
- News trading ruleA firm's restriction on opening or closing trades in a window around high-impact economic releases.
In Propcockpit
- Bar-close stopA level inside the stop loss that closes the trade only when a candle closes through it, so a wick through the level does not.
- Risk rulesThe three limits armed on a Protected account: Max daily loss and Max total drawdown as a share of Initial capital, and Max open risk, anchored to balance.
- Max open riskThe third Risk rule: the most one order may put at risk, as a share of the account.
- Firm ruleThe ceiling a prop firm imposes, which a trader's own Risk rules clamp to and can never be stored above.
- Initial capitalThe account size the prop firm issued, which every percentage rule is anchored to.
- BaselineThe point Max daily loss is measured from: the higher of balance and equity, captured at the Daily reset.
- BufferWhat is left of the day: the daily loss limit, less today's loss, less the risk of the open positions.
- ReserveThe slice of Max daily loss held back for the slippage and fees between the decision and the fill.
- Enforced limitMax daily loss minus the Reserve: the daily figure Propcockpit actually gates on.
- Protected accountA Trading account the trader has selected for protection and armed Risk rules on.
- Broker connectionAn OAuth link to one cTrader ID, exposing the Trading accounts under it.
- External positionA position on a Protected account opened outside Propcockpit, directly in a cTrader app.
- Unprotected positionA position with no stop loss at the broker, typically one opened outside Propcockpit.
- BreachEquity falling below the Baseline less the daily limit (a daily Breach), or below the static drawdown floor (a drawdown Breach).
- LockThe state after a Breach: new orders and any change that adds risk are refused, pending orders are cancelled, and everything that only removes risk stays open.
- Auto-flattenClosing every open position automatically at a Breach. A Pro and Premium capability on top of the Lock.
- FlattenClose all open positions across Protected accounts in one action: the FLATTEN ALL kill switch.
- Day's ceilingThe Risk rules a Protected account's day began under, which no limit may be moved beyond until the next Daily reset.
- FreshnessHow current the prices and positions on screen are: live, held, stale, degraded or disconnected.
- Support referenceThe PC-XXXXXX id minted for every risk and order event, so any decision can be found and explained afterwards.
- JournalThe record of what the risk engine and the order path decided, and why, with a Support reference on every entry.
- SignalAn inbound TradingView alert at a trader's webhook endpoint asking for a trade action.