Topic
Prop Trading
Evaluations, drawdown floors, consistency rules and payouts: trading under someone else's rule book, worked through on hypothetical accounts.
A prop firm evaluation is a rule book with a profit target attached. The rule book decides far more attempts than the target does, and every firm writes its rules differently, so each page here uses a hypothetical rule set and tells you which line of your own firm's terms to check.
The drawdown calculator tracks a static or trailing floor day by day, which is the quickest way to see how much room an account really has left.
Analysis
- Prop Firm Evaluation Fees: Budget Them Like a Business Cost
Evaluation fees pay off for a trader whose strategy already fits the rules; set a quarterly fee budget and stop when it is spent.
- Prop Firm Consistency Rule: How to Trade Your Best Day
Under a consistency rule a big day raises the profit you need before a payout, so cap daily gains near the rule's limit.
- Intraday Trailing Drawdown: Why Giving Back Profit Costs You
When the drawdown trails intraday highs, a winner that fades back to flat costs real room, so take partial profits and size small early.
- How to Pass a Prop Firm Evaluation: Slowly or Not at All
A prop evaluation rewards staying inside the drawdown, so risk small per trade and accept a slower path to the profit target.
Explainers
Glossary
- Daily loss limit
A cap on how much a trading account may lose within one trading day, set by a prop firm or by the trader, beyond which trading stops for the day or the account fails.
- Funded account
The account a prop firm gives a trader after an evaluation is passed, traded under the firm's rules, with any profit shared between trader and firm on the firm's terms.
- Profit split
The division of a funded account's profits between trader and prop firm, usually written trader share first, so 80/20 means 80% to the trader and 20% to the firm.
- Scaling plan
A prop firm schedule that raises a trader's maximum position size, or the account size itself, as the account reaches set profit milestones.
- Trailing drawdown
A prop firm's maximum loss limit measured from the account's highest balance, so the level you must not fall below rises as the account makes new highs.
Calculators
- Prop Firm Drawdown Calculator
Where a static or trailing drawdown floor sits after each day, and how much room is left.