How to Pass FTMO Challenge: Step-by-Step Guide (2026)

FTMO Challenge Overview

FTMO (Forex Trader Mobile Office) is a proprietary trading firm founded in 2015 and based in Prague, Czech Republic. It's one of the most established firms in the industry, offering funded accounts up to $200,000 after traders complete a two-phase evaluation challenge. The firm operates on a simple model: you pay to take a challenge, prove you can trade with discipline, and if you pass, FTMO funds your account and you keep 90% of profits.

FTMO offers five challenge tiers:

• Free Trial ($0/mo): Test the platform with no money at risk.
• $10K Challenge ($155/mo): Entry-level challenge with a $10,000 simulated account.
• $25K Challenge ($250/mo): Mid-tier option, most popular.
• $50K Challenge ($345/mo): For experienced traders seeking larger accounts.
• $100K Challenge ($540/mo): Advanced tier with higher profit targets.
• $200K Challenge ($1,080/mo): The maximum account size available.

The challenge costs are one-time fees. If you fail the challenge, the fee is non-refundable. However, if you pass Phase 1 and move to Phase 2, the Phase 1 fee rolls forward. Most importantly: if you pass both phases and reach a payout, FTMO refunds your initial challenge fee. This makes the funded trading opportunity essentially free if you succeed.

FTMO supports MT4, MT5, and cTrader platforms, making it accessible to most traders. You can trade forex, stocks, crypto, and futures depending on your account type.

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FTMO Challenge Rules You Must Know

FTMO challenges have strict rules designed to eliminate reckless traders. Understanding every rule before you start is non-negotiable. Here's the breakdown:

Profit Target (Phase 1):

• $10K account: $1,000 profit target (10%)
• $25K account: $2,500 profit target (10%)
• $50K account: $5,000 profit target (10%)
• $100K account: $10,000 profit target (10%)
• $200K account: $20,000 profit target (10%)

Daily Drawdown Limit: You cannot lose more than 5% of your starting account balance in a single day. For a $25K account, this means a $1,250 daily loss limit. If you hit this limit at any point during the trading day, all your positions are automatically closed.

Maximum Drawdown (Phase 1): Your total loss from peak equity cannot exceed 10% of your starting balance. For a $25K account, this is a $2,500 loss limit from your highest equity point. Once you hit this, your account is closed.

Time Limit (Phase 1): You have 30 calendar days to complete Phase 1. This is a hard deadline—if 30 days pass, your challenge ends regardless of progress.

Restricted Instruments (Some Account Types): Certain leveraged instruments like oil, gold, and index futures may be restricted depending on your challenge type. Check your specific account rules before trading anything exotic.

Weekend Holding Restrictions: On some account types, you cannot hold positions over the weekend. This prevents gap risk from Monday opens wiping your account. Confirm your account type's specific restrictions.

News Trading Ban: Major economic news releases are often restricted. You cannot place trades during high-impact news events (e.g., non-farm payroll, central bank decisions). FTMO publishes a calendar of restricted times.

Phase 2 (Verification Phase): After passing Phase 1, you enter a 15-day verification phase with the same profit target (10%) and stricter drawdown rules: 5% daily, 5% total maximum drawdown. This is intentionally harder to confirm your Phase 1 success was skill, not luck.

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Step-by-Step Strategy to Pass

Step 1: Choose the Right Challenge Size

Your first decision determines your survival rate. A $10K challenge with a $1,000 profit target seems easier, but it's not. Smaller accounts are more volatile percentage-wise and easier to blow up on a single bad trade. Most professionals recommend starting with a $25K challenge ($250 fee). It gives you enough capital to trade properly sized positions without overleveraging.

Step 2: Calculate Your Maximum Risk Per Trade

This is the math that saves accounts. On a $25K challenge with a 10% profit target ($2,500) and a 10% maximum drawdown ($2,500), you have exactly $2,500 of room before game over. You'll also face a 5% daily drawdown limit ($1,250).

Risk no more than 1% per trade. This means:

• Account size: $25,000
• 1% risk per trade: $250 maximum loss per trade
• If your stop loss is 50 pips on EUR/USD, your position size must be small enough that 50 pips = $250 loss

Conservative traders use 0.5% risk per trade. At $25K, that's $125 per trade. This is slower but dramatically increases your pass rate because you can afford more losing streaks.

Step 3: Pick Your Trading Style and Markets

Stick to one market and one timeframe. Don't try to day trade, swing trade, and scalp simultaneously. Most FTMO traders succeed on:

• Forex (EUR/USD, GBP/USD): Tight spreads, predictable moves, 24-hour liquidity
• Stocks (large-cap US names): Trending markets, easier to read
• Crypto (BTC, ETH): Higher volatility, larger moves, 24/7

Avoid exotic pairs, binary options, and highly leveraged futures unless you have specific edge in them.

Step 4: Define Your Trading Rules (Write Them Down)

Before you start, write explicit rules for:

• When you enter (specific setup, not "when it feels right")
• Where your stop loss goes (distance in pips/points)
• Where your profit target is (risk/reward ratio—aim for 1:2 minimum)
• How many trades per day maximum (prevent revenge trading)
• When you stop trading (if down $X in a day, you stop)

Example: "I trade EUR/USD only on 4-hour chart. Entry when price breaks above 20-day moving average with RSI above 60. Stop loss 50 pips below entry. Take profit 100 pips above entry. Max 4 trades per day. If down $500 before 2pm EST, I stop trading."

Step 5: Respect the 5% Daily Drawdown Rule Like Your Life Depends On It

On a $25K account, your daily loss limit is $1,250. If you lose $1,000 on your first three trades, you have only $250 left for the rest of the day. STOP. Don't try to revenge trade and win it back. Walk away. Many traders lose accounts because they don't respect this rule and keep trading after hitting 80-90% of their daily limit.

Step 6: Scale Your Profits Conservative

Once you're up $500-$1,000, reduce your risk or sit tight. Don't suddenly increase position size because you're ahead. You need only $2,500 profit total. A 10% account gain is your target, not a 50% gain. Treat every win like a partial victory and protect it.

Step 7: Don't Skip Phase 2 Prep

Phase 2 is harder: same 10% profit target but with a 5% total maximum drawdown (not 10%). You cannot afford a single big loss. This phase sorts real traders from lucky ones. Plan your Phase 2 strategy while in Phase 1—assume you'll trade smaller, more conservatively.

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Risk Management Framework

The Golden Rules of FTMO Risk Management:

Rule 1: 1% Risk Per Trade Maximum

Calculate it this way: (Account Balance × 0.01) ÷ (Stop Loss Distance in Pips) = Position Size

For a $25K account, 1% risk = $250. If your stop loss is 50 pips and your instrument is worth $5/pip, then $250 ÷ $5 = 50,000 units (or 0.5 micro-lots on standard forex).

Rule 2: The Daily Loss Threshold

Your daily drawdown limit is 5% of starting balance. Before that hits, you should have a personal stop: typically 2.5-3% of your daily limit.

$25K account × 5% = $1,250 daily limit. Your personal stop: hit 3 consecutive losses, or down $750 (3% daily limit), whichever comes first. Then stop trading for the day.

Rule 3: The Equity Stop

Track your peak equity (highest balance you've reached during the challenge). Your maximum drawdown is 10% below that peak. If you reach peak equity of $26,000, your drawdown limit is now based on $26,000, not $25,000. Once you drop to $23,400, stop trading.

Rule 4: Risk/Reward Ratio of At Least 1:2

If your stop loss is 50 pips, your profit target must be at least 100 pips. This 1:2 ratio means winning 50% of your trades keeps you profitable (2 wins × 100 pips = +200; 2 losses × 50 pips = -100; net +100).

Rule 5: Maximum 5 Trades Per Day

More trades = more variance. Limit yourself to 5 quality trades per day. If you're tempted to trade a 6th time, you're likely emotional. Stop.

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Common Reasons Traders Fail FTMO

Mistake 1: Overleveraging Positions (40% of failures)

Traders risk too much per trade. They think "if I risk 5%, I can win faster," but one bad streak wipes them out. The math is brutal: a 20% loss requires a 25% gain to break even. Overleveraging spirals into catastrophic losses quickly.

Mistake 2: Revenge Trading After Losses (30% of failures)

A trader has a $500 loss, panics, and doubles position size on the next trade to "win it back." The 5% daily drawdown rule punishes this severely. Instead of recovering, they hit the daily limit and the account closes.

Mistake 3: Trading During High-Impact News (15% of failures)

FTMO restricts news trading for a reason. Major news events create 100-200 pip gap moves in seconds. If you're holding a position, you get stopped out on a gap. Even if you're not trading, the volatility forces stop-hunts on tight stops. Check the economic calendar and stay out of the market 15 minutes before major news.

Mistake 4: No Written Trading Plan (25% of failures)

Traders make it up as they go. "I'll trade when I feel like it" is a recipe for disaster. Emotional decision-making breaks under pressure. The traders who pass FTMO have written rules they follow every single day, regardless of emotion.

Mistake 5: Trading Too Many Instruments (20% of failures)

Trying to trade EUR/USD, GBP/USD, gold, oil, and S&P 500 simultaneously spreads your edge too thin. Pick one pair or instrument, master it, then expand. FTMO challenges are won with focused execution, not scattered attempts.

Mistake 6: Not Respecting the Weekend Rule (10% of failures)

Some account types don't allow weekend holds. Traders ignore this, hold a position Friday, and gap-open Monday for a $2,000 loss on a $25K account. Read your account's rules. If weekend holds are restricted, close all positions Friday before market close.

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Day-by-Day Sample Challenge Plan ($25K Account)

Days 1-5: Conservative Entry Phase (Target: +$300)

• Trade only your highest-conviction setups
• Risk 0.5% per trade ($125 maximum loss)
• Aim for 3-4 trades total, hit 2 winners
• If you're down $300 total, stop trading and reassess
• Goal: Prove your strategy works, build confidence
• Expected P&L by day 5: +$250 to +$500

Days 6-15: Building Phase (Target: +$1,200)

• Increase to 1% risk per trade ($250 maximum loss)
• Trade 4-5 setups per day
• Maintain 1:2 risk/reward ratio
• If equity is flat or slightly down, trade smaller (0.7% risk)
• Daily stop loss: if down $700, stop trading for the day
• Expected P&L by day 15: +$1,500 to +$2,000 cumulative

Days 16-25: Refinement and Protection Phase (Target: +$1,000 more)

• You're at +$1,500 to +$2,000. Your job is protection, not aggression.
• Scale back to 0.75% risk per trade
• Trade only the clearest setups (pass on marginal trades)
• If you hit +$2,300, take 2 days off and let the account breathe
• Daily stop loss: if down $500, stop for the day
• Expected P&L: +$2,500 total (challenge complete)

Days 26-30: Closing Phase (Already Passed)

• If you've hit $2,500+ profit, you've passed Phase 1
• Don't over-trade in final days trying to compound more
• Trade only if your edge is clear; if not, wait for Phase 2

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FTMO vs Other Prop Firms

FTMO is one of several options in the prop trading space. Here's how it compares:

FTMO vs Apex Trader Funding: Apex's challenges are often easier (higher daily drawdown limits on some tiers), but the profit split is 80/20 vs FTMO's 90/10. FTMO rewards discipline more generously. FTMO also refunds your challenge fee on first payout, while Apex keeps it.

FTMO vs TopstepTrader: Topstep focuses on stock/futures traders and has a lower challenge fee ($199 for similar accounts). However, FTMO's 90% profit split is significantly better than Topstep's, and FTMO has more transparent, consistent rules. Topstep's proprietary platform can feel restrictive compared to MT4/MT5 on FTMO.

FTMO vs Funded Trading Plus: FTP's challenges are cheaper, but FTMO's rules are clearer and less likely to change mid-challenge. FTP has had complaints about inconsistent enforcement. FTMO's track record since 2015 is more stable.

For a detailed comparison of all available prop firms and their rules, see our full proprietary trading comparison.

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What Happens After You Pass

Your Funded Account: Once you pass both Phase 1 and Phase 2, FTMO opens a live funded account with the size you challenged on ($25K, $50K, etc.). Your challenge fee is refunded in full.

Profit Split: 90/10: You keep 90% of all profits. FTMO takes 10%. This is paid biweekly, not monthly. If you make $500 profit in a week, you get paid $450.

Drawdown Rules on Live Accounts: Your funded account has similar rules to Phase 2: 5% daily drawdown limit and 10% maximum drawdown. These are permanent—you must respect them forever. Violate them and your account closes.

Scaling Plan: If you want a larger account, you must purchase a new challenge and pass it separately. FTMO does not have an automatic scaling system where you graduate from $25K to $50K. This is one area where competitors like Apex have smoother scaling.

Withdrawal Schedule: You can withdraw profits every biweekly payout cycle. FTMO offers multiple withdrawal methods: bank transfer, cryptocurrency, etc. Payouts typically arrive within 5-7 business days.

Long-Term Viability: FTMO accounts remain active as long as you keep them funded. If your account drops below a certain equity level, FTMO may close it. However, if you're profitable and respect the rules, your account will remain open indefinitely with access to larger capital tiers (through additional challenges).

For more details on FTMO's features, rules, and trader feedback, read our full FTMO review.