Drawdown
The decline from a defined balance or equity reference. Static, trailing, end-of-day, and intraday methods behave differently.
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Daily loss limit
The maximum permitted loss during a firm-defined day, often calculated from balance, equity, or both.
Trailing drawdown
A loss threshold that moves upward after gains under the firm’s stated formula.
End-of-day drawdown
A threshold normally recalculated after a session closes instead of continuously intraday.
Profit target
The gain required to complete an evaluation phase, subject to every other rule.
Consistency rule
A limit on how much of total profit may come from one day or trade.
Minimum trading days
The number of distinct eligible days required before passing or requesting a payout.
Profit split
The stated portion of eligible profit allocated to the trader after applicable conditions.
R-multiple
A result divided by the amount initially risked; +2R means twice the planned risk.
Expectancy
Average expected result per trade, commonly calculated from win rate, average win, and average loss.
Profit factor
Gross winning amount divided by gross losing amount.
Sample size
The number of observations used in an analysis; small samples demand greater caution.
Slippage
The difference between an expected fill and the actual fill.
Walk-forward test
A process that tunes on one period and evaluates on a later unseen period.
Look-ahead bias
Accidentally using information that would not have been available at the simulated decision time.
Survivorship bias
Analyzing only markets or strategies that remained visible after failures disappeared.
Overfitting
Building rules that match past noise so closely that they fail on new data.
Monte Carlo analysis
Repeatedly rearranging or resampling outcomes to explore a range of possible paths.
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