Glosario de prop trading

Prop Trading Terms, Explained

Plain-English definitions of the words you'll see in every prop firm's rules, with how each one works at Clarity Traders.

• Evaluation
• Daily loss limit
• Max loss limit
• Trailing drawdown
• Consistency rule
• Reward split
• KYC
• Pip and lot

Prop firm

A proprietary trading firm. You pay a fee, trade an account under the firm's rules, and receive a share of the profits you make. Clarity Traders accounts are simulated and use virtual capital.

Evaluation (challenge)

A test phase where you must hit a profit target without breaking a loss limit. Clarity's One Step has one phase with a 10% target; Two Step has two, at 8% then 5%. Compare accounts.

Funded account

The account you trade after passing the evaluation. Profits on a funded account count toward payouts.

Instant account

An account with no evaluation: you start funded from day one, usually with tighter loss limits. Clarity's Instant accounts have a 3% daily and 5% max loss limit.

Profit target

The gain you need to reach to pass a phase, as a percentage of the starting account size. On a $100,000 account, an 8% target is $8,000.

Daily loss limit (daily drawdown)

The most you can lose in one trading day. At Clarity it's measured from your balance at the start of the day and resets each new day: 3% on Instant, 4% on One Step and 5% on Two Step. See yours in dollars.

Max loss limit (max drawdown)

The most your account can lose in total. Break it and the account is closed. At Clarity it's 5% on Instant, 6% on One Step and 8% on Two Step during the evaluation, and 10% once funded.

Static vs trailing drawdown

A static limit stays at the same dollar level. A trailing limit moves up as your account grows, so it follows your gains. Clarity's max loss limit is static; the daily limit on Instant accounts trails.

Balance vs equity

Balance is your account value from closed trades. Equity is balance plus or minus the profit or loss on open trades. The max loss limit is checked against equity, so open trades count.

Consistency rule

A payout rule that limits how much of your requested profit can come from a single day. At Clarity, no day can be more than 10% of a payout on Instant or 20% on One Step and Two Step. Check a payout.

Minimum trading days

The fewest days you must trade before passing or requesting a payout. Clarity has no minimum to pass; funded accounts need 7 trading days before a payout.

Reward split (profit split)

The share of profit you receive. At Clarity it starts at 70%, rises to 80% on your second payout and 90% after that, or 100% with the 100% Rewards add-on.

Payout cycle

How often you can request a payout. At Clarity it's every 14 days, or weekly with Express Payouts, paid in USDT.

KYC

Know Your Customer: identity verification. You complete it in your dashboard before your first payout.

Breach

Breaking a hard rule, such as a loss limit. A breached account is closed and isn't eligible for payouts.

High-frequency trading (HFT)

Very fast, high-volume automated trading. It isn't allowed at Clarity, and every trade must stay open for at least 60 seconds.

Expert Advisor (EA)

An automated trading program, usually on MetaTrader. At Clarity, EAs need the EA add-on. See the platforms.

Pip and lot

A pip is the standard unit of price movement, 0.0001 on most currency pairs. A standard lot is 100,000 units of the base currency, so on EUR/USD one pip on one lot is worth $10.

Spread

The gap between the bid and ask price, and part of your trading cost. You can watch ours on the live spreads page.