<\/span><\/h3>\n\n\n\nThis rule is also referred to as the \u201ctrader\u2019s daily stop-loss\u201d and according to the rules of the firm, the maximum daily loss is set at 5% (10% for the Aggressive option) of the original account balance. The rule goes further to say that at any time of the day (CET), during trading, the outcome of all trades whether open or closed should not reach the specified daily loss limit. The formula is given below:<\/p>\n\n\n\n
Current daily loss = results of closed positions of a given day + result of open positions<\/em><\/strong>.<\/p>\n\n\n\nExample<\/em><\/strong><\/h4>\n\n\n\nFor instance, for the FTMO Challenge with the original account balance of $200,000, the maximum daily loss limit is set at $10,000. If the trader happens to lose $8,000 in his closed trades, the trader is not allowed to have his account decline beyond $2,000 on that particular day. In addition to that, the account must not go -$2,000 in the trader\u2019s open floating losses.<\/p>\n\n\n\n
Let’s explain more, let us assume the trader closed trading positions with a loss of $6,000 and then opens a new trading position that enters a floating loss of about -$5,700 but eventually ends up being a positive trade. even if the the trade was successful, but the trader will be eliminated, because at a particular point of the day, the trader\u2019s daily loss was -$11,700 on the equity, which has exceeded the acceptable loss of $10,000.<\/p>\n\n\n\n
The maximum daily loss limit also includes swaps and commissions; the trader should take note of this.<\/p>\n\n\n\n
On the other hand, if the trader should make a profit of $5,000 in a day, then the trader is allowed to lose $15,000 but the losses must not exceed that.<\/p>\n\n\n\n
The trader should remember that his\/her maximum daily loss also takes into account the open trades.<\/p>\n\n\n\n
FTMO follows Central European Time<\/em><\/strong><\/h4>\n\n\n\nTraders also need to watch out because the Maximum daily loss resets at midnight CET. For example, if the trader had a profit of $4,000 one day, and also has an open position featuring a currently floating loss of $13,000 on that same day, then the maximum daily loss for that day has not been eclipsed. The daily loss for that day is $9,000 ($4,000 closed profit \u2013 $13,000 open position). However, if the trader should hold this position with an open loss of $13,000 after midnight, then the daily loss limit will be breached. This happens because the profit from the previous day does not carry over to a new day and the open loss of $13,000 is more than the maximum permitted daily loss of $10,000.<\/p>\n\n\n\n
Conclusion<\/em><\/strong><\/h4>\n\n\n\nOverall, the size of the Maximum Daily Loss allows the trader to have enough wiggle room to trade and assures the investor (the firm) of a well-defined daily risk. This way, both the trader and investor stand to benefit from this rule since the value of the account will not be permitted to drop below the limit. This is another reason why the maximum daily loss limit encompasses the possible floating losses of the trader.<\/p>\n\n\n\n
<\/span>Maximum Loss<\/strong><\/span><\/h3>\n\n\n\nThis rule can also be referred to as \u201caccount stop-loss\u201d and it goes to say that at no point during the duration of the account must the equity decline beyond 90% of the original account balance. For the FTMO Challenge with an account balance of $100,000, it translates that the lowest possible equity of the account can be $90,000. It should be remembered again that this is an addition of both closed and open positions (the focus is on the account equity and not the account balance). The logic behind the calculation is similar to that of the maximum daily loss except that this is not limited to just one day but covers the whole duration of the evaluation period.<\/p>\n\n\n\n
The limit also encompasses swaps and commissions. Ten percent of the original account balance provides the trader with sufficient space to show that his\/her account is worth the investment. This rule is put in place to serve as a buffer that should keep the trader going even if some losses were suffered initially. It also gives the investor a guarantee that the account of the trader will not decline below 90% (80% for the aggressive option) of its value under any kind of condition.<\/p>\n\n\n\n
<\/span>Profit Target<\/strong><\/span><\/h3>\n\n\n\nFor the FTMO Challenge, the profit target is set to 10% (20% for the Aggressive option) of the original balance and for the Verification, it is set to 5% while it is 10% for the Aggressive option. So, the profit target for the Verification is essentially half of the FTMO Challenge even though the duration of trading days is double.<\/p>\n\n\n\n
Profit target is an indication that a profit was achieved by the trader in the sum of closed positions on the allocated trading account anytime within 30 calendar days for the FTMO Challenge or 60 calendar days if it is the Verification step. Furthermore, when the trading period comes to an end, all trading positions must have been closed for it to be determined whether the profit target has been achieved or not.<\/p>\n\n\n\n
Example<\/em><\/strong><\/h4>\n\n\n\nFor instance, in the FTMO Challenge, if the trader opts for the account balance of $100,000, then going by the template mentioned above, the profit target is $10,000 for the FTMO Challenge and $5,000 for the Verification.<\/p>\n\n\n\n
When can you get a free FTMO challenge<\/em><\/strong>?<\/h4>\n\n\n\nTraders should note that they will be provided with a new free FTMO Challenge each time they meet all the trading objectives (irrespective of whether it is the FTMO Challenge or Verification) except when it comes to the Profit target. For traders to be eligible to receive the new FTMO Challenge for free, they need to have a positive account profit when the duration ends and all the trading positions have been closed.<\/p>\n\n\n\n
<\/span>What are the rules that doesn’t Excite at FTMO?<\/strong><\/span><\/h2>\n\n\n\nIn this section of the article, we will be looking at some aspects that FTMO has no specific rules for. Unlike other platforms, FTMO doesn\u2019t have rules about the following:<\/p>\n\n\n\n
<\/span>Trading News<\/strong><\/span><\/h3>\n\n\n\nWhile undergoing the two-step evaluation course, traders are free to trade during news releases without restrictions. However, once traders complete the evaluation course, they have to be careful about trading the news unless the account type they have is the Swing account. In that case, they can trade the news as they wish. So, the restrictions only set in when a trader has access to an FTMO funded account that is being used for trading.<\/p>\n\n\n\n
<\/span>Trading Overnight<\/strong><\/span><\/h3>\n\n\n\nAs long as the trader is still trying to pass the FTMO Challenge or the Verification, then they are allowed to maintain open positions overnight and even over the weekend. However, once they become a full-fledged FTMO trader, it is a different story entirely. The firm requires its traders to close their positions just before the close of the markets for the weekend. Traders are expected to respect and adhere to the market timings. The only exception is for traders with an account type like the FTMO Swing account, in which it is acceptable to hold open trading positions over weekends.<\/p>\n\n\n\n
<\/span>Instruments Allowed<\/strong><\/span><\/h3>\n\n\n\nTraders are given total freedom here as all the assets available in the trading platform are eligible for trading which include Forex, Stocks, Indices, Commodities, Crypto, etc. The firm does not impose any restrictions on the instruments or position sizes that traders can trade while also allowing traders to use their preferred trading styles and strategies as long as they are legitimate and are in line with market conditions in real-time.<\/p>\n\n\n\n