FTMO Rules Explained: Drawdown, Profit Targets & Time Limits (2026)

FTMO Rules Overview

FTMO (Forex Traders Management Office) is a Prague-based proprietary trading firm founded in 2015. It operates on a two-phase evaluation model: traders purchase a challenge account and attempt to meet profit targets within strict risk parameters. Once both phases are passed, traders gain access to a funded account with up to $200,000 capital and keep 90% of all profits.

Unlike traditional brokers, FTMO doesn't make money from spreads — it profits only when traders succeed. This creates alignment: FTMO has incentive to set realistic rules. The firm operates in forex, stocks, crypto, and futures across MetaTrader 4, MetaTrader 5, and cTrader platforms.

Key stat: Established in 2015 with a 4.5/5 rating. Industry-leading 90% profit split. Free trial available to test the platform before paying any challenge fee.

Account Types and Pricing

FTMO offers a tiered challenge system. You pay once to enter; the fee is non-refundable if you fail, but refunded on your first payout if you pass both phases.

Account Type	Initial Capital	Challenge Fee	Duration
Free Trial	Demo account	$0	Limited time
$10K Challenge	$10,000	$155	30 + 60 days
$25K Challenge	$25,000	$250	30 + 60 days
$50K Challenge	$50,000	$345	30 + 60 days
$100K Challenge	$100,000	$540	30 + 60 days
$200K Challenge	$200,000	$1,080	30 + 60 days

Free Trial: All traders can test the platform, rules, and execution with zero risk before paying. This is valuable — use it to verify the platform matches your trading style and that you can manage the risk parameters.

Profit Targets

FTMO uses a two-phase evaluation model with declining profit targets:

• Phase 1 (Duration: 30 days): Achieve 10% profit on the account balance. Example: On a $10,000 account, you need $1,000 profit. On a $100,000 account, you need $10,000 profit. No maximum profit limit — exceed 10% and you still pass.
• Phase 2 (Duration: 60 days): Achieve 5% profit on the starting balance. You must maintain the account throughout this period without hitting drawdown limits (see below). You can carry profitable positions into Phase 2.

Key rule: Profit targets are calculated on the original account balance, not current balance. If your $10,000 account grows to $11,000 during Phase 1, the Phase 1 profit target remains $1,000 (10% of the original $10,000), not $1,100.

Deadline behavior: You have 30 days and 60 days respectively to hit these targets. They are deadline-based, not conditional — if day 30 arrives and you haven't hit 10%, Phase 1 is failed, regardless of whether you have a profitable trade pending.

Drawdown Rules

FTMO's drawdown rules are strict and are the primary reason traders fail challenges. There are two separate limits:

• Daily Drawdown Limit: 5% of the starting account balance per calendar day. If your account drops 5% in a single trading day, all trading stops. Positions cannot be opened or closed; you must wait for the next calendar day. Example: $10,000 account → $500 daily limit. If you lose $500 in one day, you cannot trade the rest of that day.
• Maximum Drawdown (Trailing): 10% of the starting account balance. This is a trailing maximum, not a static drawdown from entry. It measures the largest peak-to-trough decline from your account's highest balance ever. If your account hits $11,000 and then drops to $9,900, you have a 10% drawdown (from the $11,000 peak). The account is then closed.

Reset mechanics:

• The daily drawdown limit resets at midnight (market time) each calendar day. Monday's losses don't carry into Tuesday.
• The maximum drawdown is cumulative and never resets. Once you hit the 10% maximum drawdown from your account's all-time high, the challenge ends.
• Weekend gap: If your account is at $10,500 Friday and gaps down to $9,200 Monday morning due to weekend news, this counts as a $1,300 (12.4%) maximum drawdown against your $10,000 starting balance. You fail.

Practical impact: The 5% daily + 10% max drawdown combination forces position sizing discipline. On a $10,000 account, you can only afford to risk ~$200–400 per trade ($100–200 risk with 2:1 R:R). Aggressive traders who risk 2–3% per trade will exhaust their drawdown limit in 2–5 bad trades.

Trading Restrictions

FTMO's rules restrict certain high-risk trading behaviors:

• Weekend Holding: You cannot hold positions over weekends on certain account types. All positions must be closed by Friday market close (exact times vary by market). This eliminates gap risk but forces day/swing trading discipline.
• News Trading: Trading during high-impact news events is restricted. FTMO publishes a calendar of restricted times (typically 15–30 minutes around major economic data releases like NFP, ECB decisions, Fed statements). You can trade, but large candles that exceed spread limitations may violate rules.
• Lot Size Limits: Maximum position size is typically 5–10 lots per trade, depending on account size. This prevents single-trade ruin and enforces proper position sizing.
• Scalping Allowed: Scalping (holding trades <30 seconds) is permitted on most account types.
• Expert Advisors (EAs): Automated trading via MT4/MT5 EAs is allowed. No restrictions on algorithm complexity or speed.
• Copy Trading: Not allowed. You must make independent trading decisions. Copy-pasting signals from others or using copy-trading features disqualifies you.
• Hedging: Not allowed. You cannot hold both long and short positions in the same instrument simultaneously to offset risk.
• Crypto Trading: Permitted on accounts that support it, but subject to higher volatility and the same drawdown rules.

Profit Split and Payouts

Profit Split: Once you pass both evaluation phases, you keep 90% of all profits, and FTMO keeps 10%. This is industry-leading and significantly better than typical hedge funds (15–20% performance fee) or prop desk arrangements (50/50 splits).

Payout Frequency: Payouts are biweekly (twice per month), typically on the 1st and 15th of each month. You can request a withdrawal any time; FTMO processes it in the next scheduled payout window.

Minimum Withdrawal: Most sources cite a minimum of $100–500, though this may vary. Check your account dashboard for the exact threshold.

Withdrawal Methods: FTMO supports multiple withdrawal methods, including bank transfers, e-wallets, and cryptocurrency (varies by region).

Processing Time: Withdrawals typically process within 3–7 business days depending on method.

Fee Recovery: Your initial challenge fee ($155–$1,080) is refunded on your first profitable withdrawal after passing both phases. This creates a one-time cost that resets when you cash out.

Scaling Plan

FTMO offers account scaling, but it is not automatic. Here's how it works:

• First Account: You pass the two-phase challenge and are granted a funded account (up to $200,000).
• Scaling Requirements: After 30–90 days of consistent profitability, you become eligible for a larger account (typically doubling from $10K to $20K, $25K to $50K, etc.).
• Scaling Process: There is no automatic scaling. You must apply for a larger account, and FTMO reviews your performance. If you've maintained positive P&L and followed rules, you're approved.
• Cost: Scaling is not free. You pay another challenge fee for the new account size, though FTMO may offer discounts or waive fees for proven traders.
• Timeline: Scaling is slower than competitors. Plan for 3–6 months between account increases.

Reality check: FTMO's scaling is conservative. If you want to scale quickly, this may be frustrating. Competitors like Topstep or Apex offer more automatic scaling with fewer gatekeeping steps.

FTMO Rules vs. Competitors

Rule	FTMO	Topstep	Apex Trader Funding
Profit Split	90% trader / 10% firm	90% trader / 10% firm	85% trader / 15% firm (or 90% after scaling)
Daily Drawdown	5% of starting balance	4% of starting balance	6% of starting balance
Max Drawdown	10% (trailing)	10% (trailing)	10% (trailing)
Phase 1 Profit Target	10% in 30 days	8% in 30 days	10% in 30 days
Phase 2 Profit Target	5% in 60 days	5% in 60 days	5% in 60 days
Weekend Holding	Not allowed (most accounts)	Not allowed	Allowed
News Trading Restrictions	Yes (high-impact events)	Yes (high-impact events)	No restrictions
Fee Refund on Pass	Yes (on first payout)	Yes (on first payout)	No
Scaling	Manual application (slow)	Semi-automatic (fast)	Automatic (fastest)

Summary: FTMO has the strictest daily drawdown (5%) but the most lenient Phase 1 target (10% in 30 days). Its 90% profit split matches Topstep but trails Apex's best tier. For disciplined position-sizers, FTMO is equal to the best. For aggressive traders or those who like to hold weekend positions, Apex Trader Funding is more forgiving.

Red Flags and Fine Print

• Challenge Fee is Non-Refundable on Failure: If you fail either phase, the fee ($155–$1,080) is lost. Budget this as tuition, not an investment. Many traders fail 2–3 times before passing.
• Weekend Gaps Are Unforgiving: A single gap down on Monday can hit your 10% max drawdown instantly. This is a feature (risk management) and a bug (luck factor). Use weekend position sizing discipline.
• Profit Targets Are Absolute Deadlines: If you need $1,000 profit and you have $950 on day 30, you fail. There is no grace period. Set alerts 3–5 days before the deadline.
• The 10% Max Drawdown is Calculated from Peak, Not Entry: If your account peaks at $11,000, you have only $1,000 of breathing room ($10,000 starting + $1,000 gain) before hitting the 10% max drawdown and disqualification. This punishes early winners psychologically.
• Scaling Requires Re-Evaluation: Unlike Apex's fully automatic scaling, FTMO's process is manual. Approved traders can be denied if they don't meet performance thresholds over the 30–90 day evaluation.
• No Leverage Multiplier on Passed Accounts: Some prop firms offer higher leverage or smaller minimum risk percentages once you're funded. FTMO's rules remain fixed.
• Withdrawal Processing Time Can Be Slow: "3–7 business days" can extend if your bank is slow or if you're in a region with banking delays. Plan accordingly if you need funds urgently.
• Account Closure on Any Rule Violation: Trading during restricted news, exceeding lot size limits, or attempting hedges results in immediate account termination. No warnings; no second chances on the same account.

Key Takeaways

• FTMO is best for disciplined forex and stock traders with a proven track record in a demo or live account.
• The 90% profit split and free trial are industry-leading advantages.
• The strict 5% daily drawdown and 10% max drawdown require tight position sizing — most traders risk <1% per trade.
• Challenge fees are sunk costs if you fail; expect to fail 1–3 times before passing.
• Weekend position restrictions and strict deadlines demand calendar discipline.
• Scaling is slower than competitors but achievable with consistent profitability.
• FTMO's two-phase model has been proven over 9+ years in the industry.

Want more detail? Read the full FTMO review or compare FTMO to other prop firms.