Glossary
Every term,with GFN's number.
This glossary defines 176 prop trading terms and states GFN's own figure for every one of them alongside the general definition. Trailing drawdown is explained, and then named: 5% trailing on Instant, 8% non-trailing on the 2 Step. Every figure is derived from the published programme rules.
Start here
The six termsthat decide accounts
Most of what ends an evaluation is covered by a handful of rules. These are the ones worth reading before you buy anything.
Trailing drawdown
A maximum drawdown whose floor follows the account upward as it makes new highs. The distance between your peak and the breach level stays constant, so every new high moves the stop-out level with it.
Daily loss limit
The most an account may lose in one trading day before it breaches. Calculated as a percentage of the previous day's closing level, it resets at a fixed time each day and is the rule that ends most evaluations.
Consistency rule
A rule capping how much of an account's total profit may come from a single trading day. It stops one outsized day from carrying an otherwise flat account through an evaluation.
Virtual profit share
The compliant name for a prop firm's profit split: the share of virtual profits generated on a simulated funded account that is paid to the trader. The profits are simulated; the payout is real money.
Payout cycle
The interval between payout eligibility dates on a funded account. It is usually counted in calendar days from a fixed starting event rather than in trading days or calendar months.
Simulated funding
The model where a firm assesses and pays traders on simulated accounts rather than routing their orders to a market. Trading is simulated; payouts against qualifying performance are real money.
176 terms
The fullglossary
Search or filter by category. Every entry states GFN's own figure for the term, with the programme it applies to.
All 176 terms
Drawdown and risk limits
Category hub →- Balance-based drawdown
- A drawdown measured against closed balance rather than live equity. Floating losses on open positions do not move the breach level; only realised results do, once a trade is closed.
- Breach
- Any violation of an account's published rules. Breaches are graded: a soft one triggers corrective action, a hard one fails the account. The word is used for both, which is why the grade matters more than the term.
- Buffer
- The distance between current equity and the nearest breach level. It is the only figure that tells you how much risk is available right now, and it shrinks with commission and floating losses as well as with realised ones.
- Daily loss limit
- The most an account may lose in one trading day before it breaches. Calculated as a percentage of the previous day's closing level, it resets at a fixed time each day and is the rule that ends most evaluations.
- Drawdown floor
- The account level at which a maximum drawdown breach is recorded. It is the starting balance minus the drawdown allowance, expressed as a dollar figure rather than a percentage, and it is the single number to trade against.
- Drawdown recovery
- The gain required to return an account to its previous peak after a loss. Recovery is not symmetrical: a 10% loss needs an 11.1% gain to undo, and a 50% loss needs 100%.
- Drawdown reset
- The moment a drawdown calculation is recalculated from a new reference level - most often the daily loss limit rolling over to a new day, or an account level being restated after a withdrawal.
- End-of-day drawdown
- A drawdown calculated only from the closing balance of each trading day, ignoring whatever happened between the open and the close. Intraday excursions are invisible to it as long as the day finishes above the level.
- Equity curve
- A chart of account equity over time. Its slope shows the rate of return, its smoothness shows consistency, and its deepest dip is the peak-to-trough drawdown a risk limit would have had to absorb.
- Equity-based drawdown
- A drawdown measured against live account equity, which includes the unrealised profit and loss of every open position. The breach level can be touched while a trade is still running, before anything is closed.
- Hard breach
- A violation serious enough to fail or terminate the account immediately. Exceeding the daily loss limit or the maximum drawdown is the usual cause, and a later recovery in the market does not reverse it.
- High-water mark
- The highest level an account has ever reached. On a trailing drawdown it is the reference point the floor is measured down from, so every new high permanently moves the breach level upward.
- Intraday drawdown
- The worst point an account reaches during a single trading day, measured from that day's starting level. It is what a daily loss limit monitored on equity actually tests, rather than where the day happens to finish.
- Maximum adverse excursion
- The furthest a trade moves against you before it closes, whatever its final result. Measured per trade, it shows how much room a strategy genuinely needs rather than how much it eventually used.
- Maximum drawdown
- The total loss an account may take before it is failed. Expressed as a percentage of the starting balance, it sets a floor: touch it and the account breaches, whatever the account has made up to that point.
- Non-trailing drawdown
- A maximum drawdown calculated once against the starting balance and then left alone. The breach level is the same number on your first day and after months of profit, so the cushion grows with every dollar you make.
- Peak-to-trough
- The decline from an equity curve's highest point to its lowest subsequent point before a new high is made. It is the standard way of stating how deep a strategy's worst historical losing run was.
- Risk of ruin
- The probability that a sequence of trades takes an account to its breach level before it reaches its target, given a win rate, a reward-to-risk ratio and a risk per trade. It is driven mostly by position size.
- Soft breach
- A rule violation that triggers corrective action - a position closed, a warning, a review - without failing the account outright. The account survives, but the trade or the profit attached to it may not.
- Trailing drawdown
- A maximum drawdown whose floor follows the account upward as it makes new highs. The distance between your peak and the breach level stays constant, so every new high moves the stop-out level with it.
Evaluations and accounts
Category hub →- Account reset
- Paying to return a failed or drawn-down evaluation to its starting balance rather than buying a new account. It is a recurring revenue line at firms that sell it, and a real cost to track.
- Account size
- The virtual balance an account is denominated in. It scales every percentage rule into dollars, sets the fee, and determines how much a single pip of movement is worth to your objectives.
- Account suspension
- A temporary restriction on trading or payouts while a firm reviews an account. It is not the same as a breach: the account still exists, but progression and withdrawals are paused pending the outcome.
- Activation fee
- A charge some firms apply when a passed evaluation is converted into a funded account. It is separate from the evaluation fee, which is why it is so often missed when headline prices are compared.
- Consistency rule
- A rule capping how much of an account's total profit may come from a single trading day. It stops one outsized day from carrying an otherwise flat account through an evaluation.
- Demo account
- A practice account with no assessment, no rules and no payout. It exists to learn an interface or test a strategy, and nothing that happens on it qualifies you for anything.
- Evaluation
- The assessment stage of a prop programme, traded on a simulated account. Profits made during an evaluation are simulated results used to decide whether you pass; they are not withdrawable.
- Evaluation fee
- The one-time price of an assessment. It is what the trader is genuinely risking - no customer capital is exposed on a simulated account - and it is the number to compare between firms per dollar of allocation.
- Free retake
- A second attempt at an evaluation included in the original fee, granted after a hard breach. It is not a free first attempt - the evaluation was paid for - and its rules are often tighter than the original.
- Funded account
- The account a trader receives after passing an evaluation, or buys directly under an instant programme. At a simulated-funding firm it is a simulated account whose eligible gains can qualify for a real payout.
- Instant funding
- A programme with no assessment phase. You buy a simulated funded account and trade it from day one, with no profit target to clear - paid for with tighter risk limits and a lower virtual profit share.
- Live account
- A brokerage account holding a trader's own money, where orders reach a market and losses are the trader's own. It is the thing a simulated prop account is deliberately not.
- Maximum allocation
- The ceiling on how much simulated capital one trader may hold across every account with a firm. It is the real limit on how large a trader can get, and it is often lower than the largest account on sale suggests.
- Minimum trading days
- The number of separate days on which an account must trade before an evaluation phase can pass. Some firms also require a minimum profit on each qualifying day for it to count.
- One-step evaluation
- An assessment with a single profit target. Clear it without breaching and you go straight to a simulated funded account - there is no second verification phase to trade afterwards.
- Pass rate
- The share of purchased evaluations that reach a funded account. Industry figures are usually low single digits, and almost every published number is unaudited and defined differently by whoever published it.
- Phase one
- The first stage of a two-step evaluation, carrying the higher of the two profit targets. Clearing it without breaching a risk rule moves the account to phase two rather than to a funded account.
- Phase two
- The second stage of a two-step evaluation, usually at a lower profit target than the first. It exists to check the result repeats, and it is where a large share of otherwise successful attempts fail.
- Profit target
- The virtual gain required to pass an evaluation phase, stated as a percentage of the starting balance. It is the only objective you have to reach; every other rule is something you have to avoid.
- Prop firm challenge
- A paid assessment on a simulated account. Reach a virtual profit target without breaking the risk rules and the firm issues a simulated funded account that pays you a share of the gains you generate on it.
- Retake
- A second run at an evaluation after a failed one. Some firms include a retake in the original fee; others sell it, and the terms of the second attempt are not always the terms of the first.
- Scaling plan
- A published schedule under which a firm increases an account's virtual capital as the trader meets profit and consistency milestones. Not every firm runs one, and the conditions vary widely.
- Simulated account
- An account that reproduces live market conditions - prices, spreads, commission, slippage - without routing orders to a market. Every GFN evaluation and funded account is one, and no customer capital is ever exposed.
- Time limit
- A deadline by which an evaluation must be completed. Where one exists it changes the strategy entirely, because it converts a test of process into a test of process under a clock.
- Two-step evaluation
- An assessment split into two phases with separate profit targets. The first phase proves the strategy, the second - usually at a lower target - checks it repeats before the firm issues a simulated funded account.
- Virtual capital
- The simulated balance an evaluation or funded account is denominated in. It sets the size of every percentage-based rule on the account, and it is not money held on the trader's behalf.
Payouts and money
Category hub →- Bank transfer
- A payout delivered to a bank account, either domestically through a local clearing system such as ACH or internationally by wire. Wires are faster to arrive and usually carry higher fees.
- Chargeback
- A payment reversal requested from a card issuer rather than from the merchant. It is a fraud remedy, and using it as a substitute for a refund request is treated as a serious breach by every prop firm.
- Crypto payout
- A payout delivered in cryptocurrency rather than to a bank account. It settles independently of banking hours and is common among firms paying traders in markets where international wires are slow.
- First payout
- The earliest date a funded account can request money. What starts the clock differs by firm - purchase, account issue, or first trade - and that choice moves the date by days or weeks.
- Minimum withdrawal
- The smallest amount a firm will process, or the profit an account must hold before any withdrawal is permitted. The second form is a buffer that has to stay in the account rather than a transaction floor.
- Payout
- A transfer of the trader's share of eligible virtual profits from a simulated funded account. Payouts are requested on an eligibility date, processed after checks, and paid to the verified account holder.
- Payout cycle
- The interval between payout eligibility dates on a funded account. It is usually counted in calendar days from a fixed starting event rather than in trading days or calendar months.
- Payout denial
- A refused payout request. The common causes are a breach recorded before the payout was approved, incomplete identity verification, a mismatch in the receiving account, or trading that broke a conduct rule.
- Payout method
- How a firm actually sends the money: bank transfer, wire, or a payments provider that offers several rails. The method determines the paperwork, the fees and how long the transfer takes.
- Payout processing time
- The gap between requesting a payout and the money arriving. It covers the firm's review, any identity checks, the payment provider's own processing and finally the settlement time of the chosen rail.
- Payout proof
- Evidence that a firm has actually paid traders - screenshots, transfer statements or published totals. It is the most-requested and least-verifiable category of prop firm marketing, because an image proves only that an image exists.
- Profit share add-on
- An optional purchase at checkout that raises the trader's share of virtual profits above the standard rate. It is paid up front, so it only pays for itself if the account reaches a payout.
- Profit split
- The share of eligible gains paid to the trader, with the remainder kept by the firm. At a simulated-funding firm the gains being divided are virtual profits generated on a simulated account.
- Refund policy
- The published terms under which a firm will return the purchase price of an evaluation. Rights are usually strongest before the account has been accessed and narrow sharply once trading has begun.
- Refundable fee
- An evaluation fee a firm returns under stated conditions - usually with the first payout after a trader reaches the funded stage. Where it exists it is a term of the programme, not a consumer refund right.
- Rise payout
- A payout processed through Rise (Riseworks), a payments platform used to pay contractors internationally. The trader signs a short contract in Rise, then chooses how the money is delivered.
- Virtual profit share
- The compliant name for a prop firm's profit split: the share of virtual profits generated on a simulated funded account that is paid to the trader. The profits are simulated; the payout is real money.
- Withdrawal
- The act of requesting a payout from a funded account. The requested amount leaves the account balance, which changes the distance between equity and the drawdown level for everything traded afterwards.
- Withdrawal cap
- A limit on how much may be taken out of a funded account in one payout cycle, usually a percentage of the starting balance. Profit above the cap stays in the account or is removed without being paid.
Trading mechanics
Category hub →- Break-even stop
- Moving a stop loss to the entry price once a trade is far enough into profit, so the position can no longer produce a loss. It removes risk from the trade at the cost of a tighter exit.
- Commission
- An explicit per-lot charge for executing a trade, usually quoted per side. Two sides make a round turn, so the quoted figure has to be doubled to get the cost of a completed trade.
- Execution
- The process of turning an order into a filled position - the price received, the delay before it arrives, and whether the order is filled in full. It is where a strategy meets reality.
- Free margin
- Equity minus the margin currently committed to open positions. It is what remains available to open new trades or to absorb floating losses on the ones already running.
- Hedging
- Holding opposing positions in the same or correlated instruments so that one offsets the other. Used genuinely it manages exposure; used across accounts it is an attempt to game an evaluation.
- Leverage
- The ratio between the notional size of a position and the margin required to hold it. At 1:50, $2,000 of margin supports a $100,000 position - it changes what you can open, not what you may lose.
- Limit order
- An instruction to trade only at a specified price or better. It controls the price but not the fill: if the market never reaches the level, or passes through it too quickly, the order does not execute.
- Liquidity
- How much can be traded at a given price without moving it. Deep liquidity produces tight spreads and reliable fills; thin liquidity produces wide spreads, slippage and gaps.
- Lot
- The unit position size is measured in. One standard forex lot is 100,000 units of the base currency; mini and micro lots are one tenth and one hundredth of that.
- Margin
- The portion of account equity set aside to hold an open position. It is a deposit against the position rather than a cost, and it is returned to free margin when the position closes.
- Margin call
- A warning issued when equity falls to a set percentage of the margin required for open positions. It signals that the account is close to being unable to support the trades it holds.
- Market order
- An instruction to trade immediately at the best price available. It prioritises certainty of execution over certainty of price, so it will always fill but not always where expected.
- Micro lot
- 1,000 units of the base currency, one hundredth of a standard lot. Worth roughly $0.10 per pip on most dollar-quoted pairs, it is the smallest size most accounts can trade.
- Mini lot
- 10,000 units of the base currency, one tenth of a standard lot. On most dollar-quoted pairs it is worth about $1 per pip, which is the size most small evaluation accounts actually trade.
- Partial close
- Closing part of a position while leaving the remainder open. It banks some of the result and reduces the risk carried by the trade without giving up exposure entirely.
- Pip
- The standard unit of price movement in forex - 0.0001 for most pairs, 0.01 for yen pairs. A pipette is one tenth of a pip, which is why most quotes carry a fifth or third decimal place.
- Position size
- How many lots a trade is placed in. It is calculated from the dollar amount being risked and the stop distance, not chosen first - which is the reverse of how most traders approach it.
- Raw spread
- A pricing model where the spread is passed through without a markup and the cost is charged as an explicit commission instead. It separates the price you trade from the fee you pay.
- Round turn
- One complete trade - the entry and the exit together. Commission quoted per side has to be doubled to get the round-turn cost, which is the only figure worth comparing between firms.
- Slippage
- The difference between the price requested and the price filled. It appears when the market moves between order and execution, and it is most pronounced around news and at thin points in the session.
- Spread
- The gap between the bid and the ask price. It is the cost paid on entry: a position opens slightly underwater by the width of the spread before the market has moved at all.
- Standard lot
- 100,000 units of the base currency - the full-size forex contract. On most dollar-quoted pairs it is worth roughly $10 per pip, which makes it the reference every other size is scaled from.
- Stop loss
- A resting order that closes a losing position at a predetermined level. It is the mechanism that turns a risk-per-trade figure into an actual limit rather than an intention.
- Stop order
- An order that becomes a market order once a specified price is touched. Used to enter on a breakout or to exit a losing position, it fills at whatever price is available once triggered.
- Stop-out
- The automatic closing of positions when equity falls below the level needed to maintain them. On a prop account the phrase is also used loosely for hitting the maximum drawdown floor.
- Swap
- The financing charge or credit applied to a position held past the daily rollover. It reflects the interest rate difference between the two sides of the pair and can be positive or negative.
- Take profit
- A resting order that closes a position at a target price. Paired with a stop loss it fixes the reward-to-risk ratio of a trade at the moment it is placed, before the outcome is known.
- Trailing stop
- A stop loss that follows the price at a fixed distance as a position moves into profit, and stays put when it moves back. It locks in gains without capping the trade at a target.
Strategy and performance
Category hub →- Averaging down
- Adding to a losing position to improve the average entry price. It lowers the break-even level and raises the size of the loss if the position keeps moving against you.
- Backtesting
- Running a strategy over historical data to estimate how it would have performed. Useful for rejecting ideas, weak as evidence for accepting them, because the result is fitted to data already seen.
- Day trading
- Opening and closing positions within the same session, carrying nothing overnight. It avoids swap costs and weekend gap risk, and concentrates all of the account's risk into the daily loss limit.
- Expectancy
- The average result of a trade over a large sample, combining win rate and average win and loss. A positive expectancy is necessary for a strategy to work and not sufficient for it to pass an evaluation.
- Fixed fractional
- Risking a constant percentage of equity on every trade, so position size falls after losses and rises after gains. It is the standard position-sizing model and the one most prop rules assume.
- Forward testing
- Running a strategy on live data it has never seen, in real time. It is the honest test a backtest cannot be, because the results are produced by data that could not have been fitted.
- Grid trading
- Placing orders at fixed intervals above and below a price so that positions accumulate as the market moves. It profits from oscillation and accumulates exposure in a sustained trend.
- Kelly criterion
- A formula giving the position size that maximises long-run growth for a known edge. Its output is far too large for real trading, because the inputs are estimates and the drawdowns it accepts are extreme.
- Martingale
- Doubling position size after each loss so that one win recovers the sequence. The required size grows exponentially, so the strategy needs unlimited capital to survive a long enough losing run.
- Maximum consecutive losses
- The longest unbroken run of losing trades in a sample. Multiplied by risk per trade it gives the drawdown a strategy has historically produced, which is the figure a fixed floor has to absorb.
- Mean reversion
- Trading on the expectation that a price stretched away from its average will return to it. Win rates are typically high and individual losses large, which is the mirror image of trend following.
- News trading
- Trading around scheduled economic releases, where volatility and spreads both spike at once. The strategy depends on execution quality at exactly the moment execution quality is at its worst, which is why most firms restrict it on funded accounts.
- Position trading
- Holding trades for weeks or months on a longer-term view. Trade frequency is low, financing costs accumulate, and the account's result depends on a small number of outcomes.
- Profit factor
- Gross profit divided by gross loss across a sample of trades. A profit factor above 1 means the strategy made money; below 1 means it lost, whatever the win rate suggests.
- R-multiple
- A trade's result expressed in units of its initial risk. Risking $200 and making $600 is +3R; hitting the stop is -1R. It makes results comparable across account sizes and position sizes.
- Risk-reward ratio
- The size of a trade's target relative to its stop, expressed as a ratio. A 2:1 trade risks one unit to make two, which sets the win rate the strategy needs in order to be profitable.
- Scalping
- Taking many short-duration trades for small individual gains. It depends on tight costs and reliable execution, because the spread and commission are a large share of every result.
- Sharpe ratio
- Return above a benchmark cash rate, divided by the volatility of those returns. It measures how much variability was accepted per unit of return, so a smoother equity curve scores higher.
- Sortino ratio
- A variant of the Sharpe ratio that counts only downside volatility. Large gains no longer lower the score, so it measures the variability a trader actually minds rather than all of it.
- Swing trading
- Holding positions for days or weeks to capture a larger move. It requires wider stops, which means smaller positions, and it exposes the account to overnight swap and weekend gaps.
- Trade journal
- A record of every trade with its reasoning, size, levels and result. It is the only way to find out whether a strategy is being followed, as distinct from whether it is working.
- Trend following
- Entering in the direction of an established move and holding until it ends. Win rates are typically below half, and the result depends on a small number of large winners covering many small losses.
- Win rate
- The proportion of trades that finish profitable. On its own it says nothing useful - a 90% win rate with one outsized loss and a 35% win rate with large winners can produce the same result.
Tooling and execution
Category hub →- Algorithmic trading
- Trading decisions and execution driven by code rather than by a person. It covers everything from a single automated entry rule to a fully systematic strategy running unattended.
- API trading
- Placing and managing orders programmatically through an interface rather than by hand. It is how custom systems, risk monitors, journals and analytics tools connect to an account, and it carries the same rules as manual trading.
- Copy trading
- Replicating trades from one account to another automatically. Copying between your own accounts is a scaling tool; copying another person's trades, or letting them trade yours, is a different activity entirely.
- Expert advisor
- A program that places trades automatically according to coded rules. It executes a strategy without a trader present, which removes hesitation and removes judgement at the same time.
- High-frequency trading
- Automated trading at very high order rates and very short holding periods, measured in seconds or less. It depends on infrastructure rather than analysis, and it is not what a retail prop account is built for.
- Latency
- The delay between an action and its effect - an order leaving your machine and reaching the venue, or a price leaving the venue and reaching your screen. Measured in milliseconds.
- Latency arbitrage
- Trading on a price that is known to be stale because a faster feed has already moved. It profits from a delay in the environment rather than from any view about the market, and it is prohibited industry-wide.
- Tick scalping
- Taking positions for a handful of ticks at a time, often held for seconds. Where the profit comes from a pricing lag rather than a market view, firms treat it as exploiting the environment.
- Trade copier
- Software that mirrors orders from a source account to one or more destination accounts, scaling position size to each. It is the mechanism behind copy trading and multi-account management.
- VPS
- A rented always-on server used to run trading software continuously. It keeps an automated strategy running through a local power cut, a lost connection or a closed laptop.
Instruments and markets
Category hub →- Bitcoin CFD
- A contract for difference tracking the price of bitcoin. It gives exposure to the price move without holding the asset, with no wallet, no custody and no settlement in the coin itself.
- Commodities
- Raw materials traded as instruments - energy, metals and agricultural products. Prices are driven by physical supply and demand rather than by interest rates, which makes them move on a different calendar from financial instruments.
- Contract for difference
- An agreement to exchange the difference in an instrument's price between opening and closing a position. It gives exposure to the move without ownership of the underlying asset.
- Crude oil
- The two benchmark crude grades - WTI in the US and Brent internationally - traded as instruments priced per barrel. Both are volatile and both respond to inventory data and production decisions.
- Cryptocurrency
- Digital assets traded around the clock, offered on most retail platforms as contracts for difference rather than as the asset itself. Volatility is high and it does not pause for a weekend.
- Exotic pairs
- Pairs matching a major currency with a smaller or emerging-market one - USD/TRY, USD/ZAR, USD/MXN and similar. Spreads are wide, moves are large, swap charges are heavy and liquidity can disappear with very little warning.
- Forex
- The market for exchanging one currency for another, traded as pairs. It runs 24 hours from Sunday evening to Friday evening and is the deepest market by volume, which is why spreads on major pairs are so tight.
- Indices
- Instruments tracking a basket of shares - the Dow, the S&P 500, the Nasdaq 100 and their international equivalents. Traded as contracts for difference, they give index exposure without owning any share.
- Major pairs
- The most traded currency pairs, all quoted against the US dollar: EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD and AUD/USD. They carry the tightest spreads and the deepest liquidity, which makes them the cheapest pairs to trade frequently.
- Minor pairs
- Pairs between major currencies that do not include the US dollar - EUR/GBP, GBP/JPY, EUR/AUD and similar. Spreads are wider than on the majors and daily ranges are often larger, so the same strategy costs more to run.
- NAS100
- The common symbol for an instrument tracking the Nasdaq 100, an index of the largest non-financial companies listed on the Nasdaq. It is the most volatile of the major US index instruments.
- Natural gas
- A traded energy instrument priced per unit of gas, known for volatility well beyond any other commodity. Weather forecasts and weekly storage data drive most of its movement, and daily ranges regularly dwarf those of currency pairs.
- Silver
- Spot silver, quoted as XAG/USD in US dollars per troy ounce. It tends to move with gold but with a larger percentage range and materially thinner liquidity, which makes position sizing carried over from gold too large.
- SPX500
- The common symbol for an instrument tracking the S&P 500, a market-cap weighted index of 500 large US companies. It is the standard benchmark for the US equity market.
- Tick value
- What one minimum price increment is worth per contract. It is the futures and index equivalent of pip value, and it converts a stop distance directly into a dollar figure.
- Underlying
- The asset a derivative's price is derived from - the index behind an index contract, the barrel of oil behind an oil contract. You trade the derivative; the underlying sets its price.
- US30
- The common symbol for an instrument tracking the Dow Jones Industrial Average, a price-weighted index of 30 large US companies. It is quoted in index points, each worth a fixed amount per contract.
- XAU/USD
- The symbol for spot gold priced in US dollars - XAU is the code for one troy ounce. It is the most traded metal instrument and one of the most volatile instruments on a retail platform.
Sessions and events
Category hub →- Asian session
- The first major window of the trading day, centred on Tokyo and running roughly 00:00 to 09:00 UK time. Ranges are narrower and yen pairs and Australasian currencies are the most active.
- Bank holiday
- A public holiday in a market's home country. The instrument may open late, close early or not trade at all, and liquidity in related instruments thins even where they stay open.
- CPI release
- The monthly consumer price index, the headline measure of inflation. It drives interest rate expectations more directly than almost any other release, which is why it moves currencies, metals and index instruments simultaneously.
- Economic calendar
- A schedule of upcoming data releases with their expected impact, previous readings and forecasts. Checking it before a session is the cheapest risk control available to a trader.
- FOMC
- The Federal Open Market Committee, the body that sets US interest rates. Its scheduled decision, written statement and press conference move every dollar-denominated market, usually in two distinct waves about half an hour apart.
- Interest rate decision
- A central bank's scheduled announcement of its policy rate. Rate differentials drive currency valuations, so these decisions and the guidance attached to them are the largest scheduled events in forex.
- London session
- The European trading window, roughly 08:00 to 16:30 UK time. It is the highest-volume session in forex, and the one where the euro and sterling pairs do most of their daily range.
- Market close
- The end of a trading session for an instrument. Positions held through a close carry gap risk into the next open, and spreads typically widen into the final minutes as liquidity leaves.
- Market open
- The moment an instrument begins trading for a session. Opens concentrate order flow that built up while the market was closed, which is why volatility spikes and spreads take time to settle.
- New York session
- The US trading window, roughly 08:00 to 17:00 Eastern time. Most scheduled US data lands at its start, which makes the first ninety minutes the most volatile stretch of the trading day.
- Non-farm payrolls
- The monthly US employment report, released on the first Friday of the month at 08:30 Eastern. It is the single most disruptive scheduled release for dollar pairs, gold and US index instruments.
- Rollover time
- The point in the day when positions are rolled to the next value date and swap is applied. It is also when many platforms reset daily statistics, and spreads often widen briefly around it.
- Session overlap
- The hours when two trading sessions are open at once. The London-New York overlap, roughly 13:00 to 16:30 UK time, carries the highest volume and the tightest spreads of the day.
- Sydney session
- The first session to open each week, from around 22:00 UK time on Sunday. Volume is the lowest of the four, and it is where the weekly gap against Friday's close appears.
Industry, legal and operations
Category hub →- A-book
- A brokerage model where client orders are passed through to external liquidity providers rather than held internally. The broker earns from spread and commission and takes no position against the client, so its revenue follows volume.
- Account sharing
- Letting someone else trade your account, or trading an account belonging to someone else. It defeats the purpose of an assessment of an individual, and it is prohibited everywhere in the industry without exception.
- Affiliate programme
- An arrangement paying commission on sales referred through a tracked link. It is how most prop firms acquire customers, and it explains a large share of the reviews published about them.
- AML
- The controls a firm operates to prevent its services being used to move criminal proceeds. In practice it means identity checks, monitoring for unusual patterns, and refusing payments that cannot be explained.
- B-book
- A brokerage model where client orders are held internally rather than passed to a market, so the broker takes the other side of them. Client losses become broker revenue, which is the structural objection to it.
- Broker
- A firm that executes trades on a client's behalf and holds client funds to do so. It is a different business from a prop firm, with different obligations and a different relationship to the client.
- Dispute resolution
- The process for settling a disagreement about a breach, a payout or an account decision. It starts with the firm's support channel and is governed by the terms the account was bought under.
- Funded trader agreement
- The contract governing a simulated funded account: what the trader may do, how performance is measured, how payouts are calculated and on what grounds the arrangement can end.
- KYC
- The process of confirming who owns an account, using identity documents and supporting information. It is required before money moves, and it is the most common cause of a delayed first payout.
- Liquidity provider
- An institution that streams tradeable prices to brokers and venues - typically a bank or a specialist trading firm. Their aggregated quotes are what a retail price is ultimately built from.
- Market maker
- A participant that quotes both a bid and an ask continuously, profiting from the spread between them and carrying inventory risk in return. Market makers are what make an instrument tradeable in size at a predictable cost.
- Prohibited trading
- Activity a firm bans because it targets the trading environment rather than the market. It covers exploiting errors and pricing delays, coordinated trading between accounts, and third-party account management.
- Prop firm
- A company that assesses traders and pays them a share of the results they produce, rather than a broker that executes orders for clients. Most modern retail firms run the assessment on simulated accounts.
- Proprietary trading
- Trading a firm's own capital rather than client money. The traditional form employed traders in-house; the retail form assesses traders remotely and pays them a share of the results they produce.
- Restricted jurisdiction
- A country a firm will not serve, for legal, regulatory, sanctions or payment-provider reasons. Restrictions can change, and they apply to where a trader actually is rather than what an address says.
- Sanctions screening
- Checking customers and payments against sanctions lists before money moves. It is a legal obligation on the payments provider as much as on the firm, and it is not discretionary.
- Simulated funding
- The model where a firm assesses and pays traders on simulated accounts rather than routing their orders to a market. Trading is simulated; payouts against qualifying performance are real money.
- Terms of service
- The contract between a trader and a firm, covering purchases, account rules, payouts and termination. It governs everything the marketing pages summarise, and where a page and the terms disagree, the terms are what applies.
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