FTMO 1-Step trailing drawdown: 10% limit, and how the floor compresses as you profit
FTMO's trailing drawdown limit is 10% of your account balance, measured from your highest end-of-day closing balance, and the floor ratchets up every time you close at a new high. This means every profitable day instantly tightens the risk room beneath you. Below is the exact mechanic, the per-size thresholds, worked examples showing how the compression happens, and why this rule ends more accounts than FTMO's daily loss limit.
The core rule
FTMO's trailing maximum drawdown is 10% of your account balance, evaluated at the end of each trading day. The floor sits a fixed percentage below your highest end-of-day closing balance and moves in only one direction: up. Every time you close at a new high, the floor ratchets up with it and never comes back down. The corpus records no lock or freeze condition — the floor keeps trailing indefinitely.
| Field | Value |
|---|---|
| Allowance | 10% of account balance |
| Basis | Highest end-of-day closing balance |
| Intraday losses | Unrealised losses count toward equity |
| Evaluation timing | End of day (close) |
| Lock condition | None recorded — keeps trailing indefinitely |
How it works: the trailing floor
A trailing drawdown is different from a fixed drawdown. A fixed drawdown is measured from your starting balance and never changes — if you start with $50,000, your floor is permanently $47,500 (3% loss). A trailing drawdown, by contrast, is measured from your highest point and moves up with you.
On FTMO, here's the sequence:
- You start at your account balance (e.g., $50,000). Your floor sits 10% below, at $45,000.
- You have a strong trading day and close at $53,000. The floor ratchets up to $47,700 — exactly 10% below the new high.
- You are now in $3,000 profit, but your room to the floor has compressed back to $5,300 (10% of $53,000).
- A later give-back that closes below $47,700 ends your evaluation — even if you are still in net profit overall.
The drawdown numbers, by account size
FTMO's Challenge comes in three sizes. The 10% rule stays constant across all sizes, but the absolute dollar amount of room widens with the account:
| Account | Profit target (10%) | Max daily loss (5%) | Trailing max drawdown (10%) |
|---|---|---|---|
| 50k | $5,000 | $2,500 | $5,000 |
| 100k | $10,000 | $5,000 | $10,000 |
| 200k | $20,000 | $10,000 | $20,000 |
Worked example — how the floor compresses across five days
Here's a concrete scenario on a $50,000 account to show how the trailing floor creates cumulative pressure:
Example: 50k account with four profitable days and a give-back
- Day 1, open: You start at $50,000. The floor sits at $45,000.
- Day 1, close: You close at $51,500 (+$1,500). The floor ratchets to $46,350 (10% below). Room to floor: $5,150.
- Day 2, close: You close at $53,200 (+$1,700). The floor moves to $47,880. Room to floor: $5,320.
- Day 3, close: You close at $54,100 (+$900). The floor moves to $48,690. Room to floor: $5,410.
- Day 4, close: You close at $55,500 (+$1,400). The floor moves to $49,950. Room to floor: $5,550.
- Day 5, give-back: You lose $2,000 and close at $53,500. The floor stays at $49,950 (no new high). You sit $3,550 above the floor — still in profit overall, still $3,500 ahead of your starting balance, but now in serious drawdown jeopardy.
- Day 6, another down day: You lose $2,600 and close at $50,900. The floor is still $49,950. You have only $950 of buffer left before the evaluation ends.
Why the drawdown rule ends more accounts than the daily loss
FTMO's daily loss limit is $2,500 (on a 50k account) — a fixed, single-day check. The trailing drawdown is 10%, which means the room to the floor starts at $5,000 and shrinks with every profitable day. Over the course of a typical evaluation, this creates mounting pressure:
- Daily loss is a circuit breaker. It pauses you for one session if you lose 5% in a day. You can lose that much again tomorrow.
- Drawdown is cumulative. Banking $2,500 in profit tightens your room by $2,500. A series of smaller losses — $500, $600, $400 — can add up across days and close you before you hit a single daily loss limit.
- The floor compresses. As you approach your 10% profit target, the floor is highest and the room lowest. The final few percentage points toward your target become the riskiest part of the evaluation.
A 50k FTMO account over six days. Profit climbs from day 1–4, ratcheting the floor up each time. Then two losing days (day 5: −$2,000; day 6: −$2,600) compress the remaining buffer from $5,550 to just $950 in two sessions — all while the account is still in net profit.
Intraday losses and the end-of-day evaluation
The trailing drawdown is evaluated at the close, but your unrealised losses count toward your equity throughout the day. If you're holding a large unrealised loss intraday, your balance can dip below the floor before the close. However, the floor itself only moves when you close at a new high — so an intraday dip does not advance the floor, it only threatens to breach it.
This creates a practical risk: on FTMO, you can be at a new high one minute (floor locked), then see an intraday rip against you that threatens to touch the floor. If you close above the floor, you live to trade again. If you close below it, the evaluation ends regardless of whether you recovered intraday.
Why this rule matters: two trader archetypes
The early winner passes FTMO's evaluation by day 3–5 with a series of strong days and minimal give-back. The constant ratcheting of the floor is not a problem — they exit before the compression matters.
The grinder takes small, consistent wins over 10–15 days, closing each day in small profit. Each day ratchets the floor up. By day 10, the floor is locked tight, and a normal week of variance (a couple of −$800 to −$1,200 days) can end the evaluation, even though the total P&L over the two weeks is still positive.
The trailing drawdown rule effectively penalises extended evaluations and rewards closing early. It does not penalise volatility itself — a $3,000 win followed by a $2,800 loss is survivable (because the win ratchets the floor up). What it does penalise is cumulative variance after the floor has tightened.
Test your FTMO strategy against this rule
Upload a trade CSV or enter your average win rate and R — the free simulator runs your numbers against FTMO's full rule set, including the trailing drawdown compression shown above.
Run FTMO in the simulator — freeFTMO's rules can change without notice; the firm's own documentation is always the final authority. This page is independent research, not investment advice, and PropSurvival is not affiliated with, endorsed by, or sponsored by FTMO.