FTMO Evaluation Rules 2026: The 5% Daily, 10% Total, and the Best Day Rule That Only Applies to 1-Step
FTMO is one of the few prop firms old enough to have a documented track record of rule enforcement over multiple market cycles. The rules themselves are not unusual in structure — two phase targets, daily and total drawdown limits — but the specific mechanics of how those limits are calculated require precise understanding.
The most common FTMO termination cause is not rule complexity. It’s the one word in the drawdown terms that most review articles don’t emphasize: “including open positions.”
The Core Rule Set (2-Step Challenge)
| Parameter | Phase 1 | Phase 2 |
|---|---|---|
| Profit Target | 10% | 5% |
| Max Daily Loss | 5% | 5% |
| Max Total Loss | 10% | 10% |
| Min Trading Days | 4 | 4 |
| Time Limit | ❌ None | ❌ None |
| Consistency Rule | ❌ None | ❌ None |
| News Trading | ✅ (evaluation) | ✅ (evaluation) |
Key advantage of the 2-Step path: No consistency rule. There is no requirement for how your profit is distributed across days. Making 100% of your Phase 1 target in a single session is permitted under the rules, provided you satisfy the 4-day minimum through subsequent trading activity before passing.
The Drawdown Calculation That Terminates Accounts
This is the mechanism most traders conceptualize incorrectly:
The daily loss limit and maximum loss limit account for both closed trades AND floating (open) unrealized losses.
Practical implication:
You start Phase 1 with a $100,000 account. Max total loss: $10,000 (account balance cannot go below $90,000 — measuring equity including open positions).
You have $8,000 of unrealized profit locked into a long position. You enter a second trade that goes against you by $2,500. Your account equity is now $100,000 + $8,000 - $2,500 = $105,500. Still positive.
No breach yet. But:
Now the first trade reverses and drops $3,000 from its peak. Your equity: $100,000 + $5,000 - $2,500 = $102,500. Still safe.
The first trade continues down, now at -$4,000 from entry: $100,000 - $4,000 - $2,500 = $93,500 equity. Still $3,500 buffer from the $90,000 floor.
The first trade drops to -$11,000: $100,000 - $11,000 - $2,500 = $86,500 equity — instant breach of the $90,000 floor.
The account terminates. Not when you close the trade. At the moment the floating equity drops below the floor threshold.
The tactical conclusion: Any strategy that holds positions through significant drawdowns must model the aggregate floating loss against the fixed MLL floor. You cannot rely on “I’ll recover before closing” — the breach is measured in real-time against your live equity.
Daily Loss Limit: Same Calculation
The 5% daily loss limit (5% of initial balance, not current balance) applies the same way — including open positions. On a $100,000 account, if your equity drops below $95,000 at any point during the session, the daily limit is breached, and the account is terminated for that challenge.
The calculation resets at midnight Central European Summer Time (CEST). This is important for traders in non-European time zones — the “day” starts and ends at midnight Prague time, not at market open/close in your local timezone.
1-Step Challenge: The Best Day Rule
The 1-Step Challenge has different parameters and an additional rule:
| Parameter | 1-Step Challenge |
|---|---|
| Profit Target | 10% |
| Max Daily Loss | 3% (tighter) |
| Max Total Loss | 6% (some accounts) or 10% |
| Consistency Rule | Best Day Rule: no single day > 50% of total profit |
| Min Trading Days | 2 |
| Time Limit | ❌ None |
The Best Day Rule mechanics:
Unlike the 2-Step path which has no consistency rule, the 1-Step enforces: no single trading day can account for more than 50% of your total challenge profit.
This is calculated against actual profit earned, not against the profit target.
Example: You make $8,000 profit on Day 1 of a $100K 1-Step challenge. The 10% target is $10,000. You’ve hit 80% of the target in one day.
Best Day Rule check: $8,000 / $8,000 total = 100% — violates the 50% cap.
You need to earn additional profit until Day 1 represents ≤50% of total profit:
- Day 1 profit ($8,000) must = ≤50% of total
- Total must be ≥$16,000
But your target is only $10,000. The Best Day Rule extends your effective target to $16,000+ even though you’ve already passed the official 10% threshold.
The 3% daily loss limit on Phase 1 is significantly tighter than the 2-Step’s 5%. Two consecutive bad sessions can bring a confident trader within 1% of account termination.
Funded Account Rules
News Trading Restrictions on Funded Accounts
During challenge phases, news trading is unrestricted. On live funded accounts (non-swing), FTMO imposes a restriction: no new trades and no closures in the 2 minutes before and after high-impact news events.
This is a mechanical market access restriction, not a manual rule check — the trading platform blocks order execution in the window. Build your strategy’s news entry triggers around the 2-minute window.
Swing accounts (which allow overnight positioning) are exempt from this restriction.
The $400,000 Capital Ceiling
FTMO limits the maximum accumulated capital per trader or per strategy to $400,000 across all accounts. Running copy-traded strategies across multiple funded accounts hits this ceiling at scale.
If you’re operating multiple FTMO accounts or copying trades, model this ceiling into your growth plan. At $400K, FTMO will not approve additional accounts for that trader/strategy.
The “Hidden” 1% Risk Guideline on Funded Accounts
Reddit community analysis from r/PropFirm and trading Discord servers consistently surfaces reports that FTMO monitors funded accounts for what some describe as excessive single-trade risk — specifically, risking more than 1% of account balance per trade.
FTMO’s official position (per support responses): there is no explicit 1% rule in the trader agreement. However, FTMO reserves the right to review accounts showing risk management patterns inconsistent with “standard professional trading,” and has contacted traders about excessive risk before initiating payout denials.
The practical guidance from experienced community members: treat 1-2% risk per trade as an operational ceiling on funded accounts, regardless of whether a formal rule prohibits higher risk. FTMO’s payout review appears to flag accounts with outlier single-trade risk profiles.
2-Step vs 1-Step: Which Path to Choose
| Consideration | 2-Step | 1-Step |
|---|---|---|
| Risk per day | 5% daily limit | 3% daily limit (tighter) |
| Consistency required | ❌ None | ✅ Best Day Rule |
| Total drawdown risk limit | 10% + 10% | 6% or 10% (check your account) |
| Minimum sessions | 4 per phase | 2 |
| For traders who | Have concentrated single-day edge | Trade consistently but slowly |
The 2-Step path is paradoxically better for traders who occasionally have large single-day gains — because there is no consistency enforcement. The 1-Step’s Best Day Rule can trap a trader who peaks early and must keep trading to satisfy a ratio that keeps extending.
The 1-Step’s 3% daily limit is genuinely tighter. Two bad days in sequence can put a trader near account termination before hitting the 10% overall loss limit. For traders whose strategy accepts occasional daily losses of 2-4%, the 2-Step’s 5% daily cushion is the more appropriate track.
Both paths deliver the same funded account outcome. The decision is purely about which constraints your specific trading style is more likely to survive.
