How to Pass FTMO Challenge – Why Most Traders Fail [2025 Guide]

8 out of 10 traders fail the FTMO challenge. Most fail within the first 5 days. Not because FTMO is a scam. Not because they lack a strategy. But because they don't understand the rules that matter most.

This guide will show you exactly why traders fail and how to avoid the same mistakes.

Why Most Traders Fail the FTMO Challenge

The biggest pain in prop trading isn't finding a strategy. It's executing it under strict risk rules. Here's what actually kills accounts:

They don't understand the daily loss limit

One bad trade. One emotional revenge trade. Account blown in hours.

They overtrade

Multiple small losses add up faster than you think.

They risk too much per trade

Even 1% can be too much when you're chasing targets.

No daily plan

Emotions take over. Strategy goes out the window.

FTMO Daily Loss Rule Explained

The 5% daily loss limit is the biggest account killer. Here's how it works:

If your account drops 5% from the starting equity of the day, you're out. Immediately.

Example on a $100,000 account:

Starting equity: $100,000
Maximum daily loss: $5,000
If equity drops to $95,000 → Challenge failed

⚠️ This includes unrealized losses. Open positions count against you.

Common mistake: Traders take a loss, then revenge trade to recover. They lose again. Account gone in one session.

✅ Solution: Set a personal daily loss limit of 2-3%. Stop trading after hitting it. Come back tomorrow.

FTMO Max Loss Rule and Real Risk

The 10% maximum loss is your total buffer for the entire challenge.

If your account drops 10% from the initial balance at any point, you fail.

On $100,000 account: You cannot let equity drop below $90,000. Ever.

Reality check:

• If you lose 3% today, you only have 7% left for the entire challenge
• If you hit 5% daily loss twice, you're at 0% buffer
• Most traders burn through this in the first week

💡 Pro tip: Trade like you only have a 6% max loss. Keep 4% as emergency buffer.

Risk Management for FTMO Challenge

This is where 90% of traders mess up. Let's do the math:

Scenario: You risk 2% per trade

3 losing trades = 6% drawdown
4 losing trades = 8% drawdown
5 losing trades = 10% drawdown = FAILED

Think about it: How often do you have 5 losing trades in a row?

More often than you think. Especially under pressure.

Recommended risk settings for FTMO:

Risk per trade: 0.5% - 1% maximum
Daily loss limit (personal): 2% - 3%
Maximum open positions: 2-3
Take profit: 1.5:1 to 2:1 risk-reward minimum

Simple Plan to Increase Your Chances

Here's a realistic approach that actually works:

Daily routine:

1Check economic calendar. No trading during major news.
2Define 2-3 setups you're looking for. Nothing else.
3Set maximum 2 trades per day.
4Use 0.5% - 1% risk per trade.
5If you lose 2%, stop for the day. No exceptions.
6Track every trade. Review weekly.

📊 Target:

The FTMO challenge requires 10% profit. With 30 days and proper risk management, you only need 0.33% per day average. That's one good trade.

🧠 Mindset shift: You're not trying to get rich. You're trying to prove you can manage risk. FTMO wants consistent, boring traders. Be boring.

FTMO Rules and Official Conditions

Know the exact rules before you start:

Rule	Phase 1	Phase 2 (Verification)
Profit Target	10%	5%
Daily Loss Limit	5%	5%
Maximum Loss	10%	10%
Minimum Trading Days	4 days	4 days
Time Limit	30 days	60 days
Profit Split	-	80% (up to 90%)

Note: FTMO has updated their rules to be more trader-friendly. Check official conditions before starting.

Ready to Start Your FTMO Challenge?

Now you know why traders fail and how to avoid it. Start informed, start prepared.

Start FTMO Challenge →19% OFF Available

Apply proper risk management from day one. Trade small, trade consistently.

Frequently Asked Questions

Can you really pass the FTMO challenge?

Yes. About 10-20% of traders pass. The difference is discipline and risk management, not strategy. If you can control your losses and stay consistent, you can pass.

What happens if I fail the FTMO challenge?

You lose your challenge fee. However, you can buy a new challenge and try again. Many funded traders failed 2-3 times before passing. Learn from mistakes.

How many trades do I need to pass FTMO?

There's no minimum number of trades. You only need to hit the profit target while respecting the loss limits. Some traders pass with 10 trades, others with 100.

Is FTMO the best prop firm for beginners?

FTMO is the most trusted and established prop firm. Their rules are strict but fair. For beginners, the clear structure helps develop discipline. It's a great place to start.