FTMO Challenge
Rules and Objectives:
Modern prop trading is legitimate, and evaluation programs are growing in popularity. FTMO, a pioneer in the simulated trading industry, sets the standard with its Evaluation Process rules. If you’re curious about passing the FTMO Challenge and learning the rules, keep reading.
The FTMO Evaluation Process is designed to assess a trader’s skill and discipline before providing the FTMO Account that is eligible for Rewards. It consists of two main stages. The FTMO Challenge and Verification.
Here are the rules of the FTMO Challenge:
Minimum Trading Days: 4
The Minimum Trading Days in the Evaluation Process (FTMO Challenge and Verification) are 4 days. On each of these days, at least one position must be initiated. A trading day is characterised as any day during which at least one trade is conducted. If a trade spans multiple days, only the day when the trade is initiated is counted as a trading day. Lastly, the execution of a trade does not have to be consecutive.
Note that the transition to a new trading day differs across various parts of the world and always corresponds to midnight CE(S)T, i.e. the time in the Czech Republic. The volume of trading activity is not further specified by any instruments, size, or duration and is completely up to you.
Profit Target: 10 %
What kind of a challenge would it be if there was no target? You must make 10% of the initial balance in the FTMO Challenge and 5% in the Verification.
These are the core rules of the Evaluation Process. If you fail to meet one of the Trading Objectives, unfortunately, you will fail your FTMO Challenge. This is why we always promote trying the Evaluation Process if you are fully ready. On the other hand, if you manage to pass the Evaluation Process, receive the FTMO Account, and reach the first reward from such an account, we will refund you the cost of the FTMO Challenge along with the reward.
For example:
On a $100,000 FTMO Challenge you will need to achieve a $10,000 Profit Target. Your account balance has to be over $110,000.
Maximum Daily Loss: 5 %
This trading objective is the first risk management rule in the Evaluation Process. It can be considered the daily account stop loss where traders are expected to refrain from trading once reached. By default, the Maximum Daily Loss is always 5% of the initial balance of the account.
If you exceed your limit for Maximum Daily Loss, it is considered a breach of a basic FTMO Challenge rule, and your FTMO Challenge is considered failed.
For example:
In the $100,000 FTMO Challenge account, the Maximum Daily Loss is always $5,000.
To calculate the Maximum Daily Loss and avoid exceeding this rule, traders should always keep in mind that it consists of the sum of results from closed positions and the sum of current floating results of open positions.
In case you hold positions for multiple days or weeks, and have a couple of trades here and there along the timespan, it is important to remember that the Maximum Daily Loss is measured from the starting midnight balance of your account on a daily basis. In other words, at midnight Prague Time – CE(S)T, the system will recognize the balance value of the account and from this value, you are not allowed to exceed $500 or $5,000 respectively, inclusive of the sum of results from closed positions and the sum of current floating results of open positions.
Maximum Loss: 10 %
Maximum Loss can be considered as the account stop-out. The amount that you are not allowed to exceed is 10% of the initial balance, inclusive of the sum of results from open as well as closed positions.
For example: In a $10,000 FTMO Challenge account, you cannot exceed $1,000 in losses.
For example:
In a $10,000 FTMO Challenge account, you cannot exceed $1,000 in losses.
Traders in the Verification stage have a 5% Profit Target while all other rules remain the same as in the FTMO Challenge.
Once both stages of the FTMO Evaluation Process are successfully completed, the trader becomes an FTMO Trader and receives the FTMO Account, which is eligible for Rewards, allowing them to trade and earn a share of the virtual profits generated. The cost of the FTMO Challenge is refunded with the first Reward from the FTMO Account.
These are the core rules of the Evaluation Process. If you fail to meet one of the Trading Objectives, unfortunately, you will fail your FTMO Challenge. This is why we always promote trying the Evaluation Process only if you are fully ready. You can test your skills on the FTMO Free Trial account anytime and as often as you need.
