What Is FTMO? The Challenge Rules

Michael Whitman · Trading since 2017, full-time since 2020 · Published 2026-09-25

FTMO is one of the best-known names in the evaluation business, and its rules are published in full. Everything below comes from three of its official pages, read on 25 Sep 2026. Rules change, so the live pages are the authority, and the date is here so you can tell how old this reading is.

How it works

FTMO sells a test, not a loan. You pay an entry fee, trade a simulated account under a set of rules, and if you pass you become an FTMO Trader with a share of the simulated profit. The wider arrangement is covered on prop firms.

The accounts are simulated at every stage. FTMO’s how it works page states that all accounts it provides are demo accounts with fictitious funds and that any trading happens in a simulated environment only. That is the product, stated plainly by the firm itself.

The test has three moving parts. A profit target, a maximum daily loss and a maximum loss. The trading objectives page sets them out for two versions, called 2-Step and 1-Step. The page lists them with no time limit on the challenge.

The 2-Step rules

Phase 1 asks for 10% of the initial capital, and the Verification phase asks for 5%. On a $100,000 account that means a balance of $110,000, then $105,000 in the second phase.

The maximum daily loss is 5% of the initial capital, which is $5,000 a day on $100,000.

The maximum loss is 10% of the initial capital as a static limit. On $100,000 the floor sits at $90,000 and stays there.

And there is a minimum of 4 trading days, where a trading day counts only if at least one position is opened in it.

The 1-Step rules

One profit target of 10%, so $110,000 on a $100,000 account.

A tighter daily cap: 3% of the initial capital, which is $3,000 a day.

A maximum loss of 10% that trails at the end of each day. FTMO calls it an end-of-day trailing limit that “can only increase, but never decrease.”

And a best-day rule. Your best day may not be more than 50% of the profit from all your positive days. FTMO says this is not a breach; you simply keep trading until the share falls under the line.

A worked example

The daily cap is measured on equity, not on closed trades. FTMO defines it as balance plus open positions, plus or minus swaps, minus commissions. On its own $100,000 example the first day’s limit is $97,000 under 1-Step: $100,000 less the $3,000 cap. A losing position that is still open counts against that number the moment it is losing.

The trailing floor is where 1-Step differs most. FTMO’s example: on day one the floor is $90,000. If the balance stands at $104,000 at midnight, Central European time, day two’s floor becomes $94,000 — the highest balance so far, less the 10%.

Now add a hypothetical day two that closes at $97,000. Under 1-Step the floor is still $94,000, so the account has $3,000 of room left. Under 2-Step the floor never moved from $90,000, so the same balance has $7,000 of room. Same trades, same balance, and less than half the room.

That is the whole difference in one line. Profit that is banked at a daily close and then given back is not neutral under a trailing limit; it permanently raised the level at which the account fails.

The best-day rule, worked

FTMO’s own example of the best-day rule uses a $10,000 day. Across all positive days the profit is $16,000, so the best day is 62.5% of it — over the 50% line. The fix is more positive days, not a breach: total positive-day profit has to reach $20,000 before $10,000 is half of it.

The arithmetic generalizes. Divide the best day by 0.50 and that is the positive-day profit you need. A trader who has one outsized day early has quietly doubled the amount of other good days the rule now asks for. The consistency idea behind it runs through most funded programs.

After the challenge

Passing leads to an FTMO Account, still simulated. The how it works page says a trader can earn up to 90% of the simulated profits as a reward, and that the initial fee is refunded 100% with the first reward withdrawal.

The scaling plan has its own rules. FTMO lists four conditions: at least 4 months trading as an FTMO Trader since the last scale-up, at least 10% net simulated profit over those months, at least 2 processed rewards in the same period, and a positive balance at the time.

The price is not quoted here on purpose. Fees change and vary by account size; the checkout page is the only reliable source for them.

The original data

56 of the 24,971 videos in the search study behind this site put FTMO in the title, at a median of 19,778 views across 37 channels, the largest at 406,334. Of those, 39 also say challenge, at a median of 12,159. The median FTMO video runs 9.5 minutes.

7 of the 56 titles mention a payout, and they draw the biggest audience of the group: a median of 52,033 views. The rulebook is short and public; the videos that travel furthest are the ones about money coming out, which is the part the rules page can least tell you about in advance.

What that suggests: the demand is for outcomes, while the leverage is in the three rules above. Reading them in your own words before paying costs nothing.

When it fails

The first failure is treating the daily cap as closed-trade only. FTMO measures it on equity, so an open loss counts in real time. A trader who plans “I will stop after $3,000 of realized losses” can breach on a single position that has not closed yet, because the limit was never about closed trades.

The second is choosing 1-Step for the single phase without pricing the trailing floor. A good first week feels like a cushion. Under a trailing limit it is the opposite: every banked high moves the floor up behind you, and the $97,000 example above shows the room shrinking from $7,000 to $3,000 on identical trades.

The third is one very large day. Under 1-Step it does not end the challenge, but it raises the amount of other positive days you need before you can pass, which keeps you trading longer at the exact moment the floor has risen.

The fourth is reading the scaling plan as a promise. It is a list of conditions, and all four have to be met.

And the fifth is sizing from the profit target rather than the loss limits. The prop firm challenge page shows how quickly a pass rate falls once three losses can reach the daily cap.

Related

Prop firm challenge simulates what these limits do to a pass rate at different sizes. Prop firms covers what the fee actually buys. And funded account explains why passing changes who is watching the rules rather than ending them.

This page is educational, not financial advice. Test every idea on your own charts before risking money.