What is the FTMO Prop Firm?
Founded in 2014, FTMO is a European-based prop firm whose office is located in Prague, Czech Republic and is well known as the most popular prop firm for forex traders looking to get funded with challenge accounts ranging from $10,000 all the way to $200,000.
The reason FTMO is so highly respected in the trading industry is because of it’s long time track record of actually paying its traders out when they turn a profit on their accounts, plus consistency in their ability to provide good spreads across a multitude of financial instruments ranging from forex currency pairs, indices, stocks, equities, and even commodities like natural gas, oil, and precious metals like gold and silver.
What is an FTMO Challenge?
FTMO Challenge Phase
An FTMO challenge consists of a two stage evaluation process in which you purchase a “challenge” account and you begin trading a demo account where FTMO evaluates your ability to trade profitably.
In order for a trader to pass the initial challenge phase on a standard account, he or she must produce a 10% return on the principle of the account. For example, if you buy a standard $100,000 USD challenge account, your goal is to make $10,000 USD in profit.
As for constraints, you must hit the profit target of 10% within 30 days or less, plus you must have actively traded for at least 10 of the 30 days. Additionally you’re only allowed a maximum daily loss of 5% on any given day, with a maximum loss (drawdown) of 10%.
If however, you are able to remain in profit in the account over the 30 day period, FTMO will grant you a “retrial” where you can restart the challenge phase at no extra cost.
FTMO Verification Phase
Once you’ve successfully passed the challenge phase (Phase 1) of your funding challenge with FTMO, you move onto the verification phase where you must now produce a 5% return over a 60 day period. FTMO will grant you a new demo account for the verification phase.
The verification actually has similar rules to the challenge phase except for its profit target and trading period. You’ll still need to trade for at least 10 of the 60 days and avoid hitting a maximum daily loss of 5%, and avoid a maximum loss of 10% overall, but you have double the time and a profit target that is half of what the challenge phase’s target is at only 5%.
Once you’ve successfully completed the verification phase through FTMO, they’ll review your trading performance and eventually grant you a funded account.
FTMO Funded Account
Now that the challenge and verification phases are complete, FTMO will give you another demo account that they’ll now use with their proprietary algorithm to copy the trades of profitable traders using live capital. While you’re not trading live funds directly, FTMO will pay out 80% of any profits that you make on this demo account, including returning your refundable fee which you paid when you purchased the challenge account originally, so long as you turn a profit on the account and qualify for a payout.
Some things to note about the FTMO Funded account are that you still must avoid drawdowns of 10% or more (maximum loss), and must avoid the maximum loss of 5% in a single day with this account. There are no more minimum trading days in a funded account, and FTMO will only pay out if you produce a positive return in the market using the account.
While challenge accounts are extremely difficult to pass when you’re starting out with trading, we think this is a great opportunity for traders to get “funding” with a very low financial barrier to entry. You can start with a $10,000 USD challenge account for just €155 USD, or get a $200,000 USD challenge account for €1,080.
On top of that you’re able to secure as much as $400,000 in total funding through FTMO by passing multiple challenges, and they even offer 90% profit splits for traders that participate in their scaling plan.
What Types of Funded Accounts Does FTMO Offer?
FTMO Account Comparison Chart
FTMO offers accounts in many currencies including USD, GBP, EUR, CZK, CAD, AUD, and CHF. For the sake of simplicity, the chart below will show the different account sizes in USD (U.S. Dollars) as it’s the most common currency that traders choose for their challenge and funded accounts.
|Normal / Aggressive
|Normal / Aggressive
|Normal / Aggressive
|Normal / Aggressive
*Please also note that challenge fees are in Euros and fluctuate based on the currency you choose to purchase your challenge account with.
Additionally, any of the accounts above are eligible as “swing accounts” as we previously mentioned, where a trader can hold trades through weekends and restricted high-impact news events, but only get 1:30 leverage as opposed to 1:100 leverage that a standard account would get.
FTMO Normal vs Aggressive Account Types
The difference between normal and aggressive account types is that aggressive risk accounts have double the maximum daily loss, maximum loss, profit target, and the challenge fee is roughly double as well. In addition to that, FTMO does not offer a $200,000 account option for aggressive risk accounts.
The one thing to note is that with all of the trading objectives effectively doubled and the fee doubled, there is almost no difference between normal and aggressive account types since you effectively have to pay the same challenge fee as a larger normal account and get the same objectives too. For this reason, most traders just opt for the normal account.
FTMO Trading Objectives Chart
In the chart below you’ll be able to see all of the trading objectives for a standard risk funding challenge. Aggressive risk challenges are the same except maximum daily loss, maximum loss, profit target, and the refundable challenge fee are all doubled.
|Step 1FTMO Challenge
|Step 2FTMO Verification
|Step 3FTMO Funded
|Minimum Trading Days
|Maximum Daily Loss
|Refund If In Profit
Is FTMO The Right Prop Firm For You?
When it comes to picking a prop firm to trade with, you’ll want to consider the firm’s track record for paying out profits, reliability, service, and whether their challenge and funded account rules will work with your trading strategy.
In the past we’ve seen numerous prop firms fail because they either lacked the experience to run the firm properly, or because they had poor spreads and execution times, which are especially important for retaining traders for a prop firm.
If you’re looking for a reliable prop firm that has good spreads, execution, and works on a business model that is sustainable and has a proven track record of over 8+ years, FTMO is the prop firm for you. That being said, if you’re more of a swing trader, you may want to consider one of FTMO’s “swing” accounts where you’re allowed to hold trades over the weekend and through otherwise restricted news events, but only has 1:30 leverage as opposed to the standard 1:100 leverage that standard FTMO funded accounts offer.
What Is The FTMO Scaling Plan?
The FTMO scaling plan consists increasing the size of your FTMO account by 25% every 4 months with a total scale-up cap of up to $2,000,000 USD per trader (with a standard account, $1,000,000 USD for an aggressive account), an upgraded profit split of 90%, all while the rest of the trading objectives stay the same.
FTMO will scale your capital in four-month cycles assuming you’re able to generate a 10% net profit on your account over that four-month period with an average of 2.5% per month in net profit, plus you’ll also have to process at least 2 payouts in that four-month period.
In the case of an aggressive account, the same rules as stated above apply except you’ll need to generate a 20% net return which is an average of 5% per month over the four-month period, with 2 payouts processed.
Why FTMO is The Gold Standard For Prop Firms
The reason we consider FTMO to be the gold standard for prop firms is that it’s one of the longest standing remote prop firms that exists on the market and serves thousands of traders as an opportunity to trade large amounts of capital. While most prop firms that exist are located at physical offices, FTMO provides a unique opportunity which allows traders to get funding and to trade from anywhere in the world.
Additionally FTMO provides funding at a reasonable price with reasonable trading objectives on all of their funded challenge accounts, has amazing execution times and competitive spreads that most other prop firms can’t compete with. FTMO is a prop firm which has a good reputation for paying its traders out on time with accurate profit split amounts, and has all the things a consistent trader would be looking for in a prop firm that they want to do business with.
At Phantom Trading both our team members and several of our students trade funded prop firm accounts with FTMO and have been quite happy with their customer service and funded trading accounts over the past few years.
At the end of the day, when compared to other prop firms in the market, FTMO still remains the most trustworthy prop firm of them all, and while some of their competitors offer better trading objectives, they haven’t been around for quite as long, or can’t offer execution times and spreads on the level that FTMO can.
While we don’t want to discourage you from researching and trading with other prop firms (there are few really great ones out there other than FTMO), we still think FTMO is the safest place to do a challenge and get funding. However, time will tell whether other prop firms will gain trust in the market as providers of funded trading accounts and capital to aspiring and consistently profitable forex, commodity, equity, and index traders.
How To Get Forex Funding From FTMO
In order to get funding, you’ll need to prove to FTMO that you’re a consistently profitable trader by meeting their trading objectives without violating any of the rules they have set. Getting funding isn’t easy if you’re not already consistent or profitable, so having a good strategy that you’ve tested and proved in backtesting and in a live market environment.
At Phantom Trading we teach traders how to trade using a supply and demand trading strategy using smart money concepts to effectively build an edge in the market so you can produce a positive return on your FTMO account.
Now let’s go over what you’re going to need to do in order to get a funded account with FTMO.
How To Purchase FTMO Challenge
You can visit FTMO by clicking this link here to purchase an FTMO challenge in the currency of your choice, with the account size of your choice too. Once you’ve signed up for an account and purchased your challenge account you’ll then get access to your MT4/MT5 credentials so you can start trading your strategy to hit the 10% profit target.
How To Pass An FTMO Challenge
In order to pass an FTMO challenge you’ll simply need to make 10% over a period of 30 days in the challenge phase without violating any of the rules and meeting all of the additional trading objectives as outlined earlier in this article.
Not every strategy or market condition is going to allow you to extract 10% out of the market, so we suggest going for a re-trial by going break even or staying in profit if you start running low on your 30 day trading period in order to preserve your challenge fee, as opposed to trying to “hall-mary” your account to pass.
How To Pass The FTMO Verification Stage
The same applies to passing your challenge phase except you now only need to make 5% in a 60 day period. This is actually quite challenging too for some people due to the psychological pressure of being so close to getting funded. We suggest sticking to your plan and maintaining your trading processes and habits to increase your chances of passing.
Unlike a challenge account, if you go break-even or fail to hit the 5% profit target in the 60 day trading period, you’ll have to start from scratch with a new account, meaning you also forfeit your challenge fee you originally paid for the account.
What Are FTMO Free Trial Accounts
FTMO Free trial accounts are ideal for those who are simply looking to practice within a similar rule set that FTMO has to their actual challenge, verification, and funded accounts so you can get a feel for meeting the challenge objectives without actually spending money on a challenge fee.
This is a great way to practice in a live market environment without putting any money on the line, and is ideal for those who are still building or trying to prove their consistency and profitability in the market.
In conclusion, we think FTMO is one of the best prop firms out there which has a balance of good value for the challenges it offers, as well as reasonable trading objectives and rules. Again, there is a reason that FTMO is the gold standard of forex prop firms. This is mostly due to the fact that FTMO has a long standing history of being a reputable prop firm to trade with.
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FX Trader & Analyst
Writer & Editor
Rob is a funded trader from Toronto, Canada, and has been trading currencies, commodities, stocks, and cryptocurrencies for over 7 years. Outside of trading, he enjoys making music, boxing, and riding motorcycles.