FTMO Rules Explained: Drawdown, Targets, and How to Pass in 2026

FTMO is the most established prop firm in the industry — operating since 2015 and paying out hundreds of millions to funded traders. Their two-phase evaluation model has become the industry standard that most other prop firms copy. Understanding every rule before you start is what separates traders who pass from those who fail on avoidable technicalities.

FTMO Account Sizes and Fees

Account Size	Challenge Fee	Phase 1 Target	Phase 2 Target	Daily Drawdown	Max Drawdown
$10,000	€155	10% ($1,000)	5% ($500)	5% ($500)	10% ($1,000)
$25,000	€250	10% ($2,500)	5% ($1,250)	5% ($1,250)	10% ($2,500)
$50,000	€345	10% ($5,000)	5% ($2,500)	5% ($2,500)	10% ($5,000)
$100,000	€540	10% ($10,000)	5% ($5,000)	5% ($5,000)	10% ($10,000)
$200,000	€1,080	10% ($20,000)	5% ($10,000)	5% ($10,000)	10% ($20,000)

Track your FTMO daily drawdown in real time with our FTMO Drawdown Calculator.

How FTMO Calculates Drawdown

FTMO uses static drawdown — your maximum loss floor is fixed at account opening and never moves, regardless of how much profit you make.

Daily drawdown is calculated from your balance at the start of each trading day, not your peak equity. This is equity-based — open floating losses count.

Example on a $100,000 account:

• Daily limit: $5,000 (5% of account)
• If you start the day at $100,000, you cannot drop below $95,000 at any point — including unrealised losses
• If you start the day at $103,000 (after profits), your daily floor is $97,850 (5% of $103,000)

Maximum drawdown floor is permanently fixed at $90,000 (10% below initial $100,000) — it never moves up even as you profit.

Phase 1 vs Phase 2: What Changes

Rule	Phase 1	Phase 2
Profit target	10%	5%
Daily drawdown	5%	5%
Max drawdown	10%	10%
Minimum trading days	4	4
Time limit	30 days	60 days

Phase 2 exists to confirm consistency — a lower target over a longer window. Traders who pass Phase 1 with big swings often fail Phase 2 when they can't replicate those results with controlled risk.

Key Rules to Know

Minimum 4 trading days: You must place at least one trade on 4 different calendar days in each phase. Hitting the profit target in 3 days does not pass you.

Profit target is calculated on the initial balance: Not your current balance. If you start with $100,000 you need to reach $110,000 — even if your account dipped to $95,000 first.

No trading during restricted periods: Check FTMO's current news trading policy. Some account types restrict trading during major economic events.

EAs and automated trading: Allowed, but must use your own logic. Copy trading signals shared across multiple accounts are prohibited.

Crypto trading on FTMO: Bitcoin and Ethereum are available as CFDs. Leverage on crypto is typically lower than on forex pairs — factor this into your position sizing.

Most Common Reasons for Failure

1. Floating losses breaching the daily limit The single most common failure. Traders close winning trades and hold losing ones, not realising unrealised losses already count toward the 5% daily limit.

2. Overtrading to hit 10% fast The Phase 1 target is 10% — higher than most competitors. Traders take oversized positions trying to hit it quickly and blow the challenge on two bad days.

3. Missing the 4-day minimum Hitting the profit target in 3 days and assuming it's done. You still need to log at least one trade on a 4th calendar day.

4. Inconsistency between phases Passing Phase 1 with 3% risk per trade, then getting conservative in Phase 2 and not hitting the target. Or the opposite — getting reckless in Phase 2 after a comfortable Phase 1.

5. Daily drawdown on a single bad session One catastrophic trading session — a news spike, a fat-finger entry, a stop hunt — can end a challenge that took 3 weeks to build.

How to Pass FTMO

Risk 0.5–1% per trade maximum. At 1% risk, you can lose 5 consecutive trades before hitting 50% of your daily limit. At 3% risk, two bad trades end your session.

Target 0.3–0.5% per day. At 0.5%/day consistently, you hit the 10% Phase 1 target in 20 trading days — well within the 30-day window.

Stop trading at 60% of your daily limit. On a $100k account, if you're down $3,000 stop for the day. The remaining $2,000 buffer isn't worth the risk.

Use the drawdown calculator before every session:

• Starting balance for the day
• Daily limit in dollars
• Absolute equity floor
• Safe position size across all open trades

Profit Split and Payouts

• Base profit split: 80%
• Scaling plan: Earn 10% profit over two consecutive months with at least two payouts → profit split increases to 90%
• Account scaling: Account size increases by 25% when scaling conditions are met
• Payout frequency: Every 14 days after the first payout request

FTMO vs BrightFunded: Quick Comparison

If you trade crypto or want faster payouts, BrightFunded is worth comparing directly:

	FTMO	BrightFunded
Phase 1 target	10%	8%
Profit split	Up to 90%	Up to 100%
Crypto pairs	2 (BTC/ETH CFDs)	35 pairs
Payout speed	14 days	4–8 hours
Max account	$200,000	$400,000

FTMO has the stronger brand and longer track record. BrightFunded wins on crypto selection and payout speed. → Full FTMO vs BrightFunded comparison

Summary

• Phase 1: 10% profit target, 30 days, minimum 4 trading days
• Phase 2: 5% profit target, 60 days, minimum 4 trading days
• Daily drawdown: 5% of daily starting balance (equity-based)
• Max drawdown: 10% static from initial balance — floor never moves
• Profit split: 80% base, up to 90% via scaling
• Risk 0.5–1% per trade, stop at 60% of daily limit

→ FTMO Drawdown Calculator
→ BrightFunded Drawdown Calculator