Trading Glossary
Master the language of the markets. Definitions for prop firm trading, automation, and algorithmic strategies.
Prop Firm (Proprietary Trading Firm)
A company that provides capital to traders in exchange for a percentage of the profits. Traders must typically pass an 'evaluation' or 'challenge' to prove their skills before receiving a funded account.
Evaluation (Challenge)
A simulated trading test required by prop firms. Traders must hit a specific profit target without violating risk rules (like maximum drawdown) to qualify for a funded account.
Drawdown
The peak-to-trough decline during a specific period for an investment, trading account, or fund. In prop firms, hitting the 'Max Trailing Drawdown' usually results in a failed evaluation.
Mean Reversion
A financial theory suggesting that asset prices and historical returns eventually return to the long-term mean or average level of the entire dataset. The YMI 'Marty Bot' utilizes this strategy.
KPL (Key Price Level)
A proprietary price zone calculated by Young Money Investments using institutional volume and volatility data. These levels act as high-probability areas for support, resistance, or breakout entries.
NinjaTrader 8
A popular trading platform for futures traders, known for its advanced charting, market analysis, and automated strategy capabilities (C# based). YMI bots are built natively for NinjaTrader 8.
ATM Strategy (Automated Trade Management)
A feature in NinjaTrader that automatically manages open positions. It can place Stop Loss and Profit Target orders instantly when a trade is entered, reducing manual error.
Rithmic
A high-performance data feed and order routing system used by many futures prop firms (like Apex and Topstep) to connect traders to the CME exchange with low latency.
VWAP (Volume Weighted Average Price)
A trading benchmark used by traders that gives the average price a security has traded at throughout the day, based on both volume and price. It is important because it provides traders with insight into both the trend and value of a security.