FTMO Drawdown Rules: Real Calculations and 7 Tactics to Pass

FTMO drawdown violations end more Challenges than missed profit targets. Many traders enter the Challenge knowing the percentages (10% maximum loss, 5% daily loss), but they don't know how those numbers actually behave during a live session. There's a real gap between knowing a rule exists and understanding its math in real time. That gap is where funded accounts die.

This guide covers the exact formulas FTMO uses, worked examples for common account sizes, the equity-versus-balance distinction that catches experienced traders off guard, and seven specific tactics to stay inside the limits when the pressure is on.

The two FTMO drawdown limits every trader must know cold

FTMO enforces exactly two drawdown rules, and they behave differently. Many traders treat them as interchangeable. They aren't.

Maximum loss: the 10% floor that never moves downward

The Maximum Loss limit is set at 10% of the initial simulated capital, and it only moves in one direction. Once your end-of-day balance reaches a new peak, the floor rises to match it. It can never come back down.

The peak is what anchors the floor — not the current balance. This is critical to understand before you trade a single lot on an FTMO account.

Maximum daily loss: the daily reset that catches traders off guard

The Maximum Daily Loss limit recalculates fresh each day from the previous midnight CE(S)T balance. On the standard 2-Step Challenge, that limit is 5% of the initial capital. On the 1-Step Challenge, it's a tighter 3%.

Worked examples: common account sizes

$10,000 account

$100,000 account

Equity vs. balance: the distinction that kills funded accounts

FTMO calculates drawdown based on equity — your balance including open floating P&L — not just closed balance. This means an open losing trade that hasn't hit your stop yet counts against your drawdown limit in real time.

A trader with a $100,000 account, a $94,000 floor, and a trade currently floating -$5,000 in drawdown has effectively breached the maximum loss limit even if they haven't closed the trade. FTMO can close the account when equity breaches the threshold — not just when trades close.

7 tactics to stay inside FTMO drawdown limits

1. Calculate your floors before every session. Write them down. Your current maximum loss floor and your daily loss ceiling for today — not yesterday's numbers.
2. Use a real-time drawdown tracker. A spreadsheet updated after the fact is too slow. Tools like Profit Helper track drawdown and daily loss limits in real time so the number is never a surprise mid-session.
3. Size positions to give yourself margin. If your daily limit is $500 and you risk $250 per trade, you have room for two consecutive losses before breaching. Sizing for one trade that risks the full daily limit leaves zero margin for error.
4. Watch your equity curve, not just your balance. If your open floating loss approaches 60–70% of your daily limit, close or reduce the position. Don't wait for the stop.
5. Stop trading after the first daily limit breach signal. Once you're at 80% of your daily limit, the expected value of continuing is negative. Lock in, log the session, and protect the account.
6. Avoid scaling into losing positions. Adding lots to a loser accelerates equity drawdown faster than any other single behavior. One bad add can turn a contained loss into an account breach.
7. Set a personal daily cap below FTMO's limit. Many traders who pass set a self-imposed daily loss limit of 3–3.5%, giving themselves a buffer before FTMO's 5% triggers. This creates room for an emotional trade without a permanent consequence.

What violates the rules immediately

• News trading via straddle orders — FTMO enforces a 2-minute blackout before and after restricted events
• Cross-account hedging (long on one account, short on the same instrument on another FTMO account)
• Grid systems, martingale, and latency arbitrage strategies
• Copying trades from other accounts or services not permitted under the account terms

Track your numbers in real time, not just at end of day

Knowing the FTMO drawdown rules is the easy part. Knowing exactly where you stand against them at any point in a live session is what keeps funded accounts alive. Manual spreadsheets are snapshots updated after the fact — not live views of your exposure.

A funded trader needs to know their current drawdown status and daily loss exposure in real time. Profit Helper's risk management dashboard tracks max drawdown, daily loss limits, and risk per trade throughout the session, giving you a live picture of where you stand against your firm's thresholds before a breach happens.