What Is an FTMO Challenge and How Does It Work?

The FTMO Evaluation Model

FTMO is one of the most popular prop trading firms in the world, offering traders up to $200,000 in funded capital. But before you get access to that capital, you need to pass their two-phase evaluation process.

Phase 1: The Challenge

In Phase 1, you must hit a 10% profit target within 30 trading days. You must also stay within a 5% daily loss limit and a 10% maximum drawdown at all times.

Phase 2: The Verification

Phase 2 is similar but with a reduced profit target of 5% over 60 days. The same risk rules apply. Once complete, FTMO reviews your account and onboards you as a funded trader.

Key Rules to Know

• Minimum 4 trading days per phase
• Daily loss limit: 5% of initial account balance
• Maximum drawdown: 10% of initial account balance
• Profit split: up to 90%

Why Most Traders Fail

The FTMO pass rate is under 10% for self-directed traders. The primary causes are overleveraging, revenge trading after losses, and misunderstanding the daily loss calculation methodology.