Prop-evaluation terms
Plain definitions for the language of funded-trader evaluations. Where a term has a rule behind it, the entry points to the page that develops it.
The terms, defined
Funded-trader evaluation
A prop firm's paid test: reach a profit target inside a maximum-drawdown cap while satisfying a consistency rule, in exchange for trading the firm's capital afterward.
Profit target
The percentage gain an evaluation requires before it is passed - the ceiling you must reach, but never the wall that fails most attempts.
Maximum drawdown
The largest peak-to-trough equity fall an account may take before the evaluation ends; usually a hard line, sometimes trailing rather than fixed. See: respecting the drawdown.
Daily loss limit
A cap on how much an account may lose in a single session, separate from the overall drawdown and just as account-ending if breached.
Consistency rule
A limit on how much of total profit may come from one day, so a pass built on a single outsized session is disqualified. See: the consistency rule.
Position sizing
How large each trade is relative to the account; the single decision that decides most evaluations, because it sets the worst case. See: the drawdown playbook.
Fixed risk per trade
Risking the same small fraction of the account on every call, so a losing streak's damage is arithmetic and survivable by design. See: the drawdown playbook.
Conviction grade
An A-to-D label marking how strong a call is relative to its own model's measured return spread; the dial a trader sizes by. There is no E grade. See: grades you can size by.
Mean reversion
Trading a price that has stretched unusually far from a typical level and tends to snap back; the logic behind the four models, applied on different clocks.
Cryptographic timestamp
A hash of a call written to a public ledger the moment it is published, showing that its entry, its stop, its target and its grade all existed in that exact form before the market resolved it.