Trading glossary
Prop Firm
A prop firm, short for proprietary trading firm, is a company that funds traders to trade its capital in exchange for a share of the profits. Traders typically pass an evaluation with profit targets and drawdown limits before receiving a funded account, and must respect daily loss caps and maximum drawdown to keep it. The rules make discipline measurable, which is why prop traders rely heavily on journals. Traders Vault tracks demo, evaluation and funded accounts side by side with their own starting balances, so prop traders can see at a glance whether they are inside the firm's rules.
What is Prop Firm in trading?
A prop firm, short for proprietary trading firm, is a company that funds traders to trade its capital in exchange for a share of the profits. Traders typically pass an evaluation with profit targets and drawdown limits before receiving a funded account, and must respect daily loss caps and maximum drawdown to keep it. The rules make discipline measurable, which is why prop traders rely heavily on journals. Traders Vault tracks demo, evaluation and funded accounts side by side with their own starting balances, so prop traders can see at a glance whether they are inside the firm's rules.