What is the FTMO max drawdown rule?

FTMO uses a 10% maximum overall loss measured from the initial account balance — a static (balance-based) limit, not a trailing one. On a $100,000 account the floor is $90,000 and it never moves, even after you bank profit. This is one of the more forgiving drawdown structures in the industry, because the floor does not ratchet up against you as your equity climbs.

What is the FTMO daily loss limit?

5% of the initial balance, measured per day. On a $100,000 account that is a $5,000 daily floor, and it resets at the start of each FTMO trading day (00:00 CE(S)T). The daily loss includes both closed losses and open floating losses, so an unrealised drawdown intraday can breach it even if the position later recovers.

How long do you have to pass the FTMO Challenge?

There is no time limit on the FTMO Challenge or Verification as of 2026 — FTMO removed the previous 30/60-day caps. You only need a minimum of 4 trading days per phase. This removes the time pressure that pushes many traders into oversized positions, but the drawdown and daily-loss rules still apply every day you trade.

Is FTMO strict compared to other prop firms?

FTMO sits at the stricter, more conservative end on price (around $89 cheapest) but at the more forgiving end on drawdown structure (10% static). Many cheaper or futures-focused firms use trailing drawdowns of 4–6% that are functionally tighter. The strictness is mostly in the two-step evaluation and the prohibited-practice list, not the drawdown math.

FTMO Rules Explained 2026 — Max Loss, Daily Loss, Consistency

Two-stage evaluation: Phase 1 (Challenge) targets +10%, Phase 2 (Verification) targets +5%.
Maximum overall loss: 10%, static (measured from initial balance — the floor never moves).
Maximum daily loss: 5% of initial balance, resets each trading day.
Minimum trading days: 4 per phase, no overall time limit (the old 30/60-day caps were removed).
Profit split 80%, scaling to 90% on the Premium program.

FTMO’s rules sit at the strict end of the industry on evaluation structure, but the drawdown math is actually one of the more forgiving — a 10% static limit, not a trailing one. They are well-published and don’t change often. In practice, the daily loss limit and the prohibited-practice list catch more traders than the drawdown does. This guide breaks down each rule with worked dollar examples, using FTMO’s official trading objectives.

Phase 1 (Challenge)

Item	Rule
Profit target	+10%
Max drawdown	10% (static, from initial balance)
Max daily loss	5%
Minimum days	4
Time limit	None

Phase 2 (Verification)

Item	Rule
Profit target	+5%
Max drawdown	10% (static, from initial balance)
Max daily loss	5%
Minimum days	4
Time limit	None

The max drawdown rule, worked through

The 10% maximum loss is static — it is measured from your initial balance and never moves. This is the single most important thing to understand, because it is far more forgiving than the trailing drawdowns used by many cheaper or futures-focused firms.

On a $100,000 account:

The hard floor is $90,000. It stays at $90,000 the entire evaluation.
If you climb to $108,000, the floor is still $90,000 — your effective room has grown to $18,000.
Compare this to a 4% trailing drawdown (common on futures firms): the floor would chase your equity upward, so the same intraday spike-and-pullback can breach it. We explain why in drawdown types explained.

This is why a “10% FTMO” limit can be more forgiving than a “5% trailing” limit elsewhere — the reference point doesn’t move against you.

The daily loss rule, worked through

The 5% daily loss is measured from the initial balance, per day, and resets at 00:00 CE(S)T. On a $100,000 account that is a $5,000 daily floor.

Two things trip traders up:

It includes floating (unrealised) losses. If your open positions are down $5,000 intraday — even momentarily — you breach, regardless of whether they later recover.
The reset hour is fixed. The first hour after the reset is a structural weak point: you have no “cushion” of banked daily profit yet. Don’t take your largest position right after the reset.

The simple defense: size each trade so that your worst realistic losing streak in one session still leaves you above the $5,000 daily floor. Set this with the position size calculator before the session.

Funded account

No profit target.
Same 10% static drawdown and 5% daily loss rules.
80% profit split, scaling up to 90% with the Premium program.
FTMO applies consistency-style guidance to discourage single-day outsized gains — distribute profit across sessions rather than relying on one large day.

Prohibited practices

Unlike a retail broker, FTMO does not allow:

HFT (high-frequency, sub-second activity).
Hedging across accounts.
Copy trading from external signals.
Pure arbitrage strategies (including latency and reverse arbitrage).
Opening or closing trades within two minutes of high-impact news releases.

These are in the terms for a reason — they are the practices that exploit a simulated environment. If your strategy depends on any of them, FTMO is the wrong firm; read the prohibited-practice section in full before paying. We cover how to read any firm’s terms in five clauses to watch.

How FTMO compares (verified data, 2026-06-22)

Firm	Cheapest fee	Evaluation	Max drawdown	Max split
FTMO	$89	2-step	10% static	90%
FundedNext	$60	multiple	10% mixed	95%
FundingPips	$29	multiple	10% mixed	100%
The5%ers	$19	multiple	10% static	100%
E8 Markets	$48	1-step	4% trailing	100%

FTMO is not the cheapest, but the 10% static drawdown and an 11-year operating record (since 2015) are why it remains a default recommendation. See the full comparison table.

Tips for staying inside the rules

Keep risk per trade at 0.5–1% of account equity.
Stop trading after three consecutive losses on the same day.
Distribute profit across multiple sessions rather than chasing one huge win.
Never hold through a high-impact news release within the two-minute window.

In short, the rules favor disciplined, distributed returns over single big swings. The drawdown structure is forgiving; the discipline requirements are not.

→ FTMO official