Resources
Plain-language definitions for the terms you'll run into while running a white-label brokerage or prop trading firm. No jargon left unexplained.
A live demo prop firm and brokerage, credentials shown right on the page.
The terms that decide whether a challenge passes and whether a payout is made.
A maximum drawdown that follows your account upward as it grows, so the loss limit rises with every new high. Contrast with a static drawdown, which is fixed against your starting balance. This single distinction changes how much room a trader actually has more than the headline percentage does.
A maximum drawdown measured against the starting balance and never moved. More forgiving than a trailing drawdown once an account is in profit, because gains are not clawed into the limit.
The highest equity value an account has reached, used as the reference point for a trailing drawdown. Whether it is measured on equity or on closed balance decides whether an unrealised spike tightens the limit.
A limit on how much of a profit target may come from a single day or trade, commonly 30 to 40 percent. It exists to distinguish a repeatable edge from one lucky position.
The number of separate days a trader must place trades before a challenge can pass. Stops a single large winner completing an evaluation on day one.
A published schedule under which a consistently profitable funded trader is given a larger account, usually tied to profit milestones and time.
The amount a trader pays to attempt a challenge. In most jurisdictions this is treated as a service fee for an assessment rather than a deposit of client funds, which is why prop firms typically operate without a broker licence.
The waiting time between a payout being requested and being paid. Traders discuss this publicly and it is one of the most cited reasons for choosing one firm over another.
Any violation of the challenge rules that ends an evaluation or a funded account, most often exceeding the daily loss limit or maximum drawdown.
A trading approach a firm does not allow, typically martingale, grid, latency arbitrage, tick scalping or copy trading across multiple accounts. Should be written into the rules before launch, because a payout cannot fairly be denied for something the rules never mentioned.
Doubling position size after a loss to recover it. Prohibited by most prop firms because it hides risk until it produces a sudden total loss.
Placing layered orders at set intervals in both directions without a directional view. Commonly prohibited for the same reason as martingale.
Exploiting a delay between a broker's quoted price and the underlying market. Prohibited almost universally, as it profits from an infrastructure gap rather than a market view.
Software connecting a trading platform to liquidity providers, routing orders and returning fills.
A model where client orders are passed to the market. The broker earns from spread or commission and does not profit from client losses.
A model where the broker takes the other side of client orders internally. Profitable when clients lose, and the source of most conflict of interest concerns.
The overnight financing charge or credit applied to a position held past the daily rollover.
A rejected order returned with a new price because the market moved during execution. Frequent requotes are a common trader complaint.
Time between an order being submitted and filled. Usually quoted in milliseconds and a common point of comparison.
A firm quoting both a buy and sell price and profiting from the difference.
Straight Through Processing. Orders passed directly to liquidity providers without manual intervention.
A card payment reversed by the cardholder's bank. High chargeback rates put a merchant account at risk, which is why prop firms are treated as higher risk by many processors.
Politically Exposed Person. A customer in a prominent public role who requires additional checks under anti money laundering rules.
Evidence of where a customer's money came from, collected as part of anti money laundering compliance.
Money set aside to pay funded traders who succeed. The most common cause of failure in a growing prop firm is spending this on marketing.
The banking arrangement that lets a business accept card payments. Approval usually depends on legal pages, refund policy and KYC being in order.
A partner who refers customers in exchange for commission. Most prop firm growth is affiliate driven.
An affiliate structure where a partner also earns on the partners they recruit. A common gap in thin affiliate tooling.
Crediting a sale to the most recent referral link clicked. Simple, and the reason many affiliate systems undercount partners who introduced a customer earlier.
Attribution recorded between servers rather than in the browser, so it survives ad blockers and cookie restrictions.
The rate at which customers stop paying. For prop firms, the equivalent measure is how many traders never buy a second challenge.
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How to start a prop firm in 2026Costs, rules, tech and a realistic launch timeline, using the terms defined above.