The initial amount of capital allocated to a trading account in an evaluation or funded account.
The starting balance determines the available capital for trading and directly impacts position sizing, risk management, and drawdown limits. Traders should structure their trades around this balance to avoid breaching risk rules.
A trader starts an evaluation with a $50,000 account. If their profit target is $3,000 and their maximum drawdown is $2,500, they must carefully manage risk to ensure they do not hit their loss limits before reaching their target.
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 specific profit amount a trader must achieve to pass an evaluation or progress to a higher account level.
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.
The profit cushion above the starting balance, which traders must maintain to stay compliant or qualify for payouts.