How the FTMO maximum loss works
FTMO's maximum loss is static: on the $100,000 Challenge the floor sits $10,000 (10%) below your starting balance, at $90,000, and never moves. Profit does not drag it up; the line you started with is the line you finish with.
It runs alongside the 5% daily loss limit ($5,000 on the $100,000 account), which is measured from each day's starting equity and includes floating P&L. The daily line re-arms every trading day; the maximum loss never resets: every net dollar lost since day one counts against it.
A worked example on the $100,000 Challenge
Say the first week goes badly and you close it $4,000 down. Your equity is $96,000 and your remaining buffer to the $90,000 floor is $6,000. Claw the $4,000 back and bank $3,000 more, and your equity is $103,000, a $13,000 buffer. Under a trailing model that recovery would have pulled the floor up behind you; on FTMO it does not.
Breach, reset and the two phases
Crossing either line ends the Challenge: the maximum loss is a hard breach, not a lockout, and you would need a new Challenge to try again. The profit target is 10% ($10,000) in phase one across at least 4 days, so the maths favours small consistent sessions: risking 0.5–1% per trade keeps a normal losing streak far from both the 5% day and the 10% total.
- →The 5% daily loss includes floating P&L: your open drawdown counts, not just closed losses.
- →Risk a small fixed percentage per trade (e.g. 0.5–1%) so a losing streak never approaches the 5% day or 10% total.
- →Hit the 4-day minimum; a single big day cannot pass the Challenge on its own.
Figures reflect a common FTMO account at the time of writing. Firms revise rules often, so verify against the FTMO site before relying on them.
Merlin's gauges derive from closed trades. Your firm watches live equity including open positions.
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