Glossary

Crypto prop trading glossary.

The words the rules use, defined once. Each term links to a page with the number that applies here and an example; the guides put them together.

Balance and equity: Balance is the starting balance plus closed results, fees, funding and payouts; equity adds the open profit or loss of your positions at the mark price.
Breach: A breach is the moment equity falls below the daily loss floor or the max loss floor; the account stops and its positions are closed.
Composite mark price: The composite mark price combines the Bybit and Hyperliquid mark prices and decides equity and breaches, so one exchange cannot fail an account alone.
Consistency rule: A consistency rule caps the share of the total profit that your best single day may carry; above it, the target rises or the payout waits.
Daily loss limit: The daily loss limit is the most equity may fall in one trading day, measured from that day's anchor; crossing the floor ends the account.
Drawdown: Drawdown is the fall in an account from a reference point; prop firms turn it into loss floors that must not be crossed.
Evaluation phase: An evaluation phase is one stage of a challenge with its own profit target, loss limits and minimum days; pass it to move on.
Funded account: A funded account is the simulated account you trade after passing the evaluation; it keeps the loss limits and lets you request rewards.
Funding rate: The funding rate is a periodic payment between longs and shorts on perpetual futures that keeps the contract close to the spot price.
Leverage: Leverage is the position value divided by the margin it uses; a cap limits how large a position can be for the equity in the account.
Liquidation: Liquidation is the forced closing of positions when equity falls to the maintenance margin; in a challenge, the loss floors normally come first.
Max loss limit: The max loss limit is the most an account may lose in total; equity must stay above the starting balance minus that amount.
Minimum trading days: Minimum trading days is the number of separate days with at least one fill that a phase needs before it can pass.
Payout cycle: The payout cycle sets when a funded trader can request a reward: the first request after a set number of days, then at a fixed interval.
Perpetual futures: Perpetual futures are crypto derivatives with no expiry that track a coin's price through funding payments, traded long or short on margin.
Profit split: The profit split is the share of a funded account's simulated profit that the trader receives as a reward when a payout is requested.
Profit target: The profit target is the closed profit, as a share of the starting balance, that an evaluation phase needs before it can pass.
Trailing drawdown: A trailing drawdown is a loss floor that rises with the account's high, at the end of each day or on every price move, and never falls back.