How to Build a Trading Plan for FTMO

About FTMO

FTMO is a Czech Republic-based proprietary trading firm founded in 2015, making it one of the longest-standing firms in the retail prop trading space. They fund traders in forex, indices, commodities, and cryptocurrencies. Two evaluation paths are available.

2-Step Challenge

The standard path. Two phases, no time limit on either.

Phase 1 (Challenge): 10% profit target, 5% max daily loss, 10% max total drawdown, minimum 4 trading days, no time limit.

Phase 2 (Verification): 5% profit target, same drawdown rules (5% daily / 10% total), minimum 4 trading days, no time limit.

Funded account: 80% profit split, scalable to 90% through the FTMO Scaling Plan. Drawdown rules remain in effect.

1-Step Challenge

A single-phase evaluation with a higher entry fee than the 2-Step.

Phase: 10% profit target, 5% max daily loss, 10% max total drawdown, minimum 1 trading day, no time limit.

Best Day Rule: At the moment you hit the profit target, your best single profitable day cannot have accounted for more than 50% of your total accumulated positive profits. A single exceptional day that drives more than half your total gain disqualifies the pass — even if you hit 10%. This rule forces distributed results across sessions.

Funded account: 90% profit split from the outset — no scaling required to reach the higher split.

Account sizes and leverage (both paths)

Account sizes: $10K, $25K, $50K, $100K, $200K.

Leverage: Up to 1:100 on forex, 1:50 on indices and commodities, 1:5 on crypto.

A key structural detail shared by both paths: FTMO uses a balance-based drawdown, not an equity-trailing drawdown. Your daily and total loss limits are calculated from your starting balance, not your peak equity. This is meaningfully more forgiving than trailing drawdown models used by some competitors — but it also creates a false sense of security. You still have exactly 5% before a daily breach ends your challenge.

Note: Prop firm rules change frequently. Verify all parameters against FTMO’s current website before starting a challenge. Rules were accurate at time of writing (May 2026).

Why most traders fail FTMO challenges

FTMO publishes data suggesting a minority of traders pass the Challenge. The failures cluster around predictable patterns that have nothing to do with trading skill.

Chasing the profit target late in a phase. Traders approach the end of a phase, see they’re 3% toward a 10% target, and increase size or frequency to accelerate. This is the fastest route to a blown account. The target has no deadline — taking 3 months to pass is not a failure.

Revenge trading after a loss. A 2% losing day feels like a setback. A trader increases size on the next trade to recover. If that trade also loses, they’ve now used 4% of their daily buffer in two trades instead of building a methodical sequence.

Overtrading during slow sessions. Bored traders take setups that don’t meet their criteria. Every sub-standard trade carries risk with a lower expected return — exactly the combination that erodes accounts.

No position sizing formula. Traders who guess their lot size based on “how this trade feels” will eventually size into a trade that destroys a week of progress in an hour.

Treating phases as separate entities. Phase 2 traders who take risks to hit the 5% target quickly often forget the same drawdown rules apply. The verification phase has ended more funded accounts than Phase 1.

Letting winning days create complacency. After a 3% day, traders feel untouchable. They keep trading, take unnecessary risks, and give back gains. Stopping when you’ve hit a daily profit target is a skill.

The pattern is consistent: the challenge is not beaten with better analysis. It is beaten with better behaviour.

The trading plan structure that passes

A trading plan for FTMO is not a list of indicators. It is a document that answers every decision a trader might face before they face it — so there is no deliberation in the moment, only execution.

The structure that works covers four areas.

Strategy rules. What exactly constitutes a valid trade setup? Entry criteria, timeframe, confluence requirements, what you will not trade (pairs, sessions, news events). This prevents the boredom trades and the “close enough” setups that don’t have real edge.

Risk plan. Fixed percentage risk per trade. Maximum number of trades per day. What happens after two consecutive losses (you stop for the day, or at minimum pause for a defined period). Maximum daily loss in dollars — not just percentage, actual dollar amount visible before each trade.

Daily routine. When does your session start? What do you review before the open? When do you stop for the day? What do you log after each trade? A routine converts good intentions into repeatable behaviour.

Mindset framework. How do you handle losing streaks? What is your protocol when you feel the urge to “make it back”? Traders who articulate this in advance — and then follow the protocol — survive the difficult stretches.

FTMO’s rules do not punish a trader with a plan. They punish traders who are improvising.

Position sizing for FTMO’s rules

FTMO’s max daily loss is 5% of your initial balance. On a $100K account, that is $5,000 per day. Total drawdown is 10% of initial balance — $10,000 on a $100K account.

Here is how position sizing should be structured:

Fixed 1% risk per trade on a $100K account: - Max risk per trade: $1,000 - Daily loss buffer: $5,000 - Trades before daily breach at maximum loss: 5

That means five full-loss trades in a row hits your daily limit. That is extremely unlikely if you are trading genuine setups with a reasonable win rate. This is your buffer — not a target to spend.

On a $25K account: - 5% daily loss = $1,250 - At 1% risk = $250 per trade - Five losses wipes the daily buffer

The math is the same — but the dollar amounts are smaller, which psychologically makes it easier to oversize. A trader on a $25K account taking a 2% position ($500 risk) now only has 2.5 trades before a daily breach. That is not a buffer — that is one bad hour.

Recommended approach: - Risk no more than 1% per trade during Phase 1 - Risk no more than 0.75% per trade if you are below your starting balance - Set a daily stop-loss in your broker platform: if your account is down 3%, you close all trades and stop for the day. This gives you 2% of cushion for circumstances beyond your control.

The goal during Phase 1 is not to hit 10% fast. The goal is to demonstrate that you can trade a defined edge consistently over time without a drawdown breach. The profit target will take care of itself.

The daily routine that protects your account

FTMO success is a daily discipline problem, not a weekly strategy problem. Your routine is the mechanism that converts your plan into consistent execution.

TradingPlan’s routine builder structures your day across five phases:

Weekend Review: Set weekly targets, review your strategy notes, confirm your max daily loss and total drawdown status going into the week. For FTMO traders: check exactly where you sit relative to your drawdown limit before Monday opens.

Pre-Market: Identify the day’s trade candidates. Mark key levels. Check economic calendar — note any high-impact news events during your session. Confirm your position size formula for the day.

Live Session: Execute only pre-planned setups. Log each trade as it occurs. Check your running P&L against your daily stop-loss rule — not your daily loss limit, your self-imposed stop that is lower than FTMO’s limit.

Post-Market: Review every trade taken. Were the entries rule-compliant? Did you take any trades outside your defined setups? What was the result? Log your notes. Track your equity curve against both the 5% daily and 10% total drawdown ceilings.

Periodic Review: Weekly, review all trades. Monthly, review your overall challenge progress. Are you trending toward the profit target? Is your drawdown stable? Are there setup types you should stop taking?

A routine does something else that is underrated: it removes the idle time where impulsive decisions happen. If you have a defined pre-market process and a defined cutoff, you spend less time staring at charts after your session ends — which is when most FTMO breaches actually occur.

Common mistakes that bust FTMO accounts

1. Trading through news events without a rule. On standard FTMO accounts, opening positions within 2 minutes before or after a scheduled high-impact news release is a rule violation that can void trades. This is not a soft guideline — it is a specific account rule. Know which events qualify as high-impact, mark them on your calendar before every session, and have a firm rule: no new positions in that 4-minute window. A high-impact event can also spike spread to 10x normal and trigger stops that should never have been hit. If you do not have this rule written into your plan, you will eventually learn why the hard way.

2. Holding overnight on correlated pairs. Traders take two positions — EUR/USD and GBP/USD — treating them as separate trades. They are not. A gap open can hit both stops simultaneously, doubling your intended daily loss exposure.

3. Moving stop-losses to avoid being stopped out. “The setup is still valid, I just need a bit more room.” Moving a stop widens your actual risk beyond your plan. If the level is invalidated, the trade is off.

4. Not accounting for spread in position size. Entry spread means your actual cost is higher than the visible price. On volatile instruments this matters. Factor it into your risk calculation.

5. Starting Phase 2 with a Phase 1 mindset. Phase 2 has a 5% profit target, not 10%. Some traders treat it as easier and take larger positions to get through it faster. The same drawdown rules apply. A single reckless day ends the verification.

6. Ignoring the minimum trading days rule. You cannot pass Phase 1 in fewer than 4 trading days (or 1 trading day on the 1-Step). Some traders hit 10% in 2 days and then wonder why they are not moved to Phase 2. Know the rules completely.

7. Resetting and repeating the same behaviour. If you fail a challenge, the question is not “which firm should I try next.” The question is “what specific behaviour caused this, and what rule in my plan prevents it next time.”

8. Treating the 10% total drawdown as a target. The drawdown limit is not a bankroll — it is a safety net that should never be touched. If you are approaching 7-8% drawdown, something has gone wrong that requires a trading pause, not a bigger trade.

9. Violating the Best Day Rule on the 1-Step Challenge. This catches 1-Step traders who do not understand the mechanics. If you have accumulated $6,000 in total positive profits and your best single day accounts for $3,100 of that — more than 50% — you will fail even if your account is above the 10% profit target. One exceptional session can disqualify an otherwise clean evaluation. For 1-Step traders: track your cumulative positive profit as you go and cap your daily target at a reasonable fraction of that running total. Do not compound size into a single session late in the evaluation when you are close to the target.

How TradingPlan helps you stay disciplined for FTMO

FTMO sells you access to capital. It does not sell you discipline. That has to come from you — and it has to be systematised, because willpower alone fails under pressure.

TradingPlan is built for exactly this: giving traders a structured framework they can execute consistently, rather than improvising under pressure.

Strategy checklists you run before every trade. Before you enter any position, your strategy checklist confirms: does this meet every criterion? If any item is unchecked, the trade does not happen. This eliminates the “close enough” setups that don’t carry real edge.

A risk plan with your FTMO numbers built in. Set your account size, your percentage risk, your daily loss limit, and your total drawdown ceiling. The risk plan holds those numbers in front of you so there is no mental calculation in the moment.

A daily routine you execute step by step. Pre-market prep, session execution, post-market review — each phase has defined steps. You do not have to think about what to do next. You follow the routine.

Trade logging for accountability. Every trade logged creates a record that makes patterns visible. After two weeks, you will see which setup types are working and which are not — information FTMO’s dashboard does not give you.

Mindset framework for losing streaks. Define your protocol for consecutive losses before it happens. “After two losses in a day I stop trading” is a rule. Log it. Follow it. It is the rule that prevents 3% losing days from becoming 5% losing days.

FTMO’s challenge is designed to filter out undisciplined traders. A structured plan, executed consistently, is the filter you pass through.

Frequently asked questions

Does FTMO use trailing or static drawdown? FTMO uses a balance-based (static) drawdown calculated from your initial starting balance, not your peak equity. This means your daily loss limit (5%) and total loss limit (10%) are fixed dollar amounts from day one — they do not change as your account grows during the challenge. This is more forgiving than trailing drawdown models.

Is there a time limit on the FTMO Challenge? No. There is a minimum of 4 trading days on the 2-Step (1 trading day on the 1-Step), but no maximum. You can take as long as you need to reach the profit target without breaching drawdown rules. This is a significant advantage — there is never a reason to rush or overtrade.

What happens if I breach the daily loss limit? Your challenge account is automatically closed. You will need to purchase a new challenge to try again. The fee is non-refundable. This is why the daily loss limit deserves more respect than the profit target.

Can I hold trades over the weekend? FTMO does allow weekend holding on some instruments, but be aware of gap risk. An unexpected overnight gap can move against you significantly before you can act. Most disciplined traders close all positions before the weekend.

What is the FTMO Scaling Plan? The Scaling Plan increases your profit split and can increase your account size after you meet consistent profitability milestones. On the 2-Step Challenge, the funded account starts at an 80% profit split, scalable to 90% through the Scaling Plan. On the 1-Step Challenge, the funded account starts at 90% from the outset — no scaling required to reach that split. Both paths reward the same qualities the challenge tests: consistent, disciplined trading over time.

What is the Best Day Rule on the 1-Step Challenge? On the 1-Step Challenge, your best single profitable day cannot exceed 50% of your total accumulated positive profits at the moment you hit the profit target. This prevents a single lucky day from qualifying a trader. For example, if you have made $8,000 total across positive days, no single day can account for more than $4,000 of that. Structure your sessions with this in mind — avoid compounding size into a single session late in the evaluation. Track your cumulative positive profit as you go, and cap your daily target so you do not inadvertently disqualify yourself on the final day.

How do I track my drawdown in real time? FTMO provides a dashboard that shows your current balance, daily loss used, and total drawdown used. Check this before every session and after every trade. Do not rely on memory — look at the actual numbers.

Is $10,000 vs $100,000 a meaningful difference? The rules are identical as percentages — but the psychology is different. A $10K account feels more like a test. A $100K account feels like real money and can trigger emotional responses that smaller accounts do not. Many experienced traders recommend starting with a $25K or $50K account: large enough to feel real, manageable enough to stay composed.

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