The specific profit amount a trader must achieve to pass an evaluation or progress to a higher account level.
Profit targets dictate the level of aggressiveness or patience a trader needs. Some traders may need to adjust their strategy depending on how much time they have to reach the target.
A prop firm requires a trader to reach a $6,000 profit target on a $100,000 evaluation account. If the trader averages $500 in profit per trading day, they would need at least 12 trading days to reach their goal.
The number of phases a trader must complete to qualify for a funded account. Each phase typically includes meeting profit targets while adhering to risk rules.
The initial amount of capital allocated to a trading account in an evaluation or funded account.
The maximum amount a trader is allowed to lose in a single trading day. Exceeding this limit typically disqualifies the trader. There are different types of loss limits, so it is important to understand the type that applies to a chosen plan.
The maximum permissible loss from the starting balance or peak balance. Breaching the drawdown limit ends the evaluation or funded account.
A scaling parameter that determines the ratio of full contracts to micro contracts a trader is permitted to use.