THE LEXICON · EVALUATION & FUNDED ACCOUNTS
Evaluation and Funded Accounts
A prop-firm evaluation is a simulated account wearing a profit target and a set of drawdown rules. Pass it and the firm issues a funded account, which is still the firm's capital, run under the firm's rules.
The two stages
An evaluation is an account the firm opens inside a simulator and hands over with conditions attached: a profit target to reach and a set of drawdown rules that may not be crossed while reaching it. The targets, the limits and any time constraints differ by firm and by account size. There is no industry standard, and no number published on one firm's page transfers to another's. Clear the conditions and the firm issues a funded account. The plumbing behind it may not change at all. What changes is not the market; it is the rulebook the account now answers to.
The funded account is still the firm's capital, run under the firm's rules, and at many firms still simulated underneath. Where that is so it sits in the agreement rather than being hidden, which is why reading the agreement matters more than the label does. The structure explains why the rules read the way they do. The firm is not underwriting a view of the market. It is underwriting compliance with a document, and compliance is enforced by software, on a clock, without discussion.
Why the word carries weight
The word funded carries more weight than the plumbing. It lands like a hiring decision and gets repeated like one, because it is the part people say out loud. The structure underneath is narrower. The firm has built a filter and charges for entry to it, then keeps the accounts whose conduct stays inside the rulebook and closes the ones that do not. Nothing about that is concealed; it is the business model, stated in the terms. It is simply not the same arrangement as capital allocated to a trader by a desk that employs them, and the two are routinely spoken of as though they were.
What it does not tell you
Funded says nothing about how orders are handled, nothing about the size an account may carry and nothing about which rules apply after a first payout, which is firm-specific. It says nothing about the market either. The chart is identical on both sides of the pass. Two traders on the same instrument at the same second, one in an evaluation and one funded, see the same tape and live under different constraints. Everything that separates them sits in a document. None of it is visible on a screen unless something puts it there.
How the desk reads it
A working desk treats the account as a compliance object before it treats it as a trading account. The number that matters is not the balance; it is the distance to the nearest rail, because these accounts rarely die by market. They die by rule breach: a daily loss limit crossed, a consistency cap tripped, a trailing drawdown clipped on an open trade. That is the whole reason YOUR DESK carries prop rails. The daily loss limit and consistency meters sit on every prop card with a headroom line showing distance to breach, held in front of the trader during the session rather than after it.
How it gets misread
The misread is that passing is the hard part and the funded stage is the reward. The account did not get safer; the rulebook got binding. The common error is reading the balance instead of the headroom, so an account above its starting figure feels like a safe one while the trailing floor sits a single ordinary trade away. The consistency cap compounds it quietly: it ends nothing, it holds the payout, and it is often read properly for the first time when one is requested.
Where it lives
The rails that decide these accounts have entries of their own: the trailing drawdown, the daily loss limit and the consistency cap.
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