  Dark matter haloes have long been recognized as one of the fundamental
building blocks of large scale structure formation models. Despite their
importance -- or perhaps because of it! -- halo definitions continue to evolve
towards more physically motivated criteria. Here, we propose a new definition
that is physically motivated, and effectively unique and parameter-free: ''A
dark matter halo is comprised of the collection of particles orbiting in their
own self-generated potential.'' This definition is enabled by the fact that,
even with as few as $\approx 300$ particles per halo, nearly every particle in
the vicinity of a halo can be uniquely classified as either orbiting or
infalling based on its dynamical history. For brevity, we refer to haloes
selected in this way as physical haloes. We demonstrate that: 1) the mass
function of physical haloes is Press-Schechter, provided the critical threshold
for collapse is allowed to vary slowly with peak height; and 2) the
peak-background split prediction of the clustering amplitude of physical halos
is statistically consistent with the simulation data, with an accuracy no worse
than $\approx 5\%$.
