Most explanations of FTMO's rules are quoting a screenshot that is two years out of date. They will tell you about a 30-day time limit and a minimum number of trading days, both of which FTMO scrapped. That matters, because the parts of the rulebook people obsess over (the profit target) are almost never what fails them, and the parts they skim (how the two loss limits are measured, and a handful of account-killing gotchas) are exactly what does. This is a walk through the mechanics as they actually work, with the honest caveat that firms revise these terms often, so treat every number here as a mechanic to understand rather than a figure to memorise, and confirm the current values on FTMO's own rules page before you buy.

The two phases and the targets

FTMO built the two-step template most of the industry copied. You buy an evaluation and trade it in two stages before any real capital appears. The first stage, the FTMO Challenge, has generally asked for a profit target around 10% of the starting balance. The second stage, Verification, asks for roughly half that, near 5%, with the same loss limits underneath. Clear both without breaching, obey the funded-account terms, and you trade FTMO's capital for a share of the profit.

The target is the part beginners fear and the part that ends the fewest accounts. Making 10% over an open-ended period with a working strategy is not the hard bit. The reason people fail is that they treat the target as urgent, size up to reach it faster, and run straight into the loss limit. So spend your attention where the risk actually lives, which is the two drawdown rules.

The two drawdown limits (the part that matters)

FTMO measures your losses two different ways at once, and they are not interchangeable. You breach the account the instant you touch either one. Understanding the difference is most of the job, and it is worth reading a full breakdown of daily versus maximum drawdown alongside this, because the two rules govern completely different decisions.

The daily loss limit

The maximum daily loss has typically sat near 5% of the initial balance. Two details decide whether it catches you out. First, it is measured on equity, not just closed trades, so a position sitting 4% underwater has already spent 4% of your daily budget even if you fully intend to hold it. Floating losses count. Hoping a trade comes back is not a defence against the daily line. Second, the daily figure resets at a fixed server time (FTMO uses central European time), not your local midnight. A trade held across that reset drags its floating loss into a fresh day's allowance. If you swing trade or hold overnight, know the exact reset clock your account runs on, because the difference of a few hours can be the difference between a new budget and a breach.

The maximum loss limit

The overall maximum loss has generally been around 10% of the initial balance, and the important word is static. FTMO's flagship evaluation anchors that floor to your starting balance, so it does not move as you make money. Build a 6% cushion and your effective room to fall grows, because the line stays put while your equity rises above it. That is forgiving to traders who like to bank a profit buffer early and then trade more freely against it.

This is a genuine structural advantage worth understanding, because plenty of firms use a trailing floor that ratchets up behind your equity and punishes exactly that style. If you are not clear on the distinction, read trailing versus static drawdown , because it changes how you are allowed to trade once you are green. On a static floor you can press a winning run. On a trailing one, an overnight winner can tighten the limit beneath you overnight.

Time limits and minimum days: what changed

Here is where the outdated screenshots do real damage. FTMO used to impose a calendar time limit (commonly cited as 30 days for the Challenge and 60 for Verification) and a minimum number of trading days before you could pass. Both were removed. The evaluation period is now open-ended on the standard model, and there is no requirement to trade a set number of days to qualify. That is a meaningful shift in how you should approach the account. There is no clock forcing you to take marginal trades to beat a deadline, which removes one of the biggest historical causes of blown challenges. If a guide is still telling you to rush because the month is nearly up, it is describing a rule that no longer exists.

The lesson is not that time pressure is gone forever, it is that these terms are exactly the sort of thing firms change without much fanfare. What is true this quarter may not be next quarter. Read the live rules, not a forum post from 2023.

The gotchas that void accounts

Most breaches are not dramatic blowups. They are a rule the trader half-knew and did not respect, or a term that voids the account even though no drawdown line was ever touched. These are the ones that catch people.

Floating losses against the daily limit. Worth repeating because it is the most common surprise. The daily and max limits watch your equity in real time. An open, underwater position is already spending your budget.

The reset time is not your midnight. Positions carried across FTMO's server-time reset inherit their floating loss into the new day. Set the clock in your head to the firm's time zone.

Account type restrictions. FTMO has offered different account styles (commonly a Normal and a Swing variant). The Swing type generally allows holding through high-impact news and over the weekend, while the Normal type has historically restricted both, forbidding weekend holds and trades placed in a narrow window around major news. Breaching one of these can void the account even if you never came near a loss limit. If you trade the calendar, pick the account type that permits it, and see how the mechanics interact with the release schedule in a practical pass plan .

Forbidden trading practices. The rulebook prohibits a list of behaviours aimed at gaming the model rather than trading it: latency or tick-scalping exploits, high-frequency methods, opening opposite positions across accounts to hedge the risk away, copy trading another person's signals, and gambling-style martingale abuse. Fall foul of these and profits can be withheld regardless of your equity curve.

Consistency and payout terms on the funded stage. The evaluation is not the finish line. Funded accounts carry their own rules, including how soon and how often you can withdraw, and conditions on your scaling plan as you stay consistent. A pass followed by a rule slip on the funded account is a common and expensive mistake.

How to prepare for the rules before you pay

The reason a challenge feels unlike your demo is not the market, it is the presence of a hard floor that can end everything in one careless trade. You can rehearse under that exact pressure without buying an evaluation. Replay historical candles, impose the same daily and maximum loss limits on yourself, and watch how your decisions change when a breach is possible. TradeSave+ has a chart-replay backtester for simulating a run, and prop-firm account journals that track your live distance to both the daily and max drawdown lines, which is the number that actually decides your day minute to minute.

Then log every session honestly. Recording your closest approach to each limit, and whether a red day pushed you into sizing up on the next one, will show you in hindsight whether a fail came from your strategy or from a rule you misread. Get comfortable sitting near a line and doing nothing about it. That habit, far more than any setup, is what clears both phases.

Read the current rulebook, then trade the loss limit

FTMO's rules are simpler than the folklore around them, and the folklore is often stale. There is no time limit to race on the standard model, no minimum days to pad, and the target is the least of your worries. The account is decided by two loss limits, one daily and equity-based, one overall and static, plus a short list of gotchas that void accounts quietly. Learn how those are measured, confirm the live numbers before you commit, respect the loss limit as the real opponent, and the target takes care of itself.