FTMO's Maximum Daily Loss: a fixed allowance, reset from a moving line

Traders describe FTMO's daily loss limit two different ways, and only one of them is what the rule text says. The common shorthand — "you can't drop more than 5% below where you started the day" — sounds like a floor that resets to the account's running balance. What FTMO actually publishes is narrower and stricter: the allowance itself is a fixed dollar amount, sized once from your initial balance, and it never gets bigger or smaller — even as the account grows. What resets every day is only the reference point that fixed amount is measured from.

Scope: this page describes FTMO's Maximum Daily Loss, as transcribed in our rule corpus and dated below, on the FTMO Challenge (2-Step, id ftmo2) and the 1-Step. Both products carry the mechanic; only the percentage and the minimum trading days differ. For the firm's separate Maximum Loss (overall drawdown) rule, see the comparison table below.

What the rule actually does

Two facts, both drawn from FTMO's own published trading objectives, combine into the mechanic:

• The allowance is a percentage of the INITIAL balance, not of current equity. FTMO's own text: "Maximum Daily Loss Amount, which is 5% of the Initial" (2-Step) and "3% of the Initial" (1-Step). On a $50,000 account that is a flat $2,500 or $1,500 — the same dollar figure on day one of the evaluation as on the last day, whatever the account's equity has grown to.
• The floor for a given day is that day's opening equity minus the fixed allowance — not the account's original starting balance minus the allowance. FTMO's own worked example, published for a $200,000 account: "$204,000 − $10,000 = $194,000". $10,000 is the fixed 5% allowance on that account size; $204,000 is that day's opening equity, already above the account's $200,000 initial balance from prior profit. The floor moved up to $194,000 not because the rule changed, but because the reference point it's measured from did.

Put the two together and the mechanic is neither a moving percentage nor a wall bolted to the starting balance. It is a fixed-length ruler, laid down fresh each morning against wherever the account's equity happens to be standing.

A worked example

Say you're on the $50,000 FTMO Challenge (2-Step), 5% Maximum Daily Loss:

1. Day 1 opens at $50,000 equity. Today's floor: $50,000 − $2,500 = $47,500.
2. You close the day up $2,000. Equity is now $52,000.
3. Day 2 opens at $52,000. Today's floor recalculates: $52,000 − $2,500 = $49,500. The floor rose $2,000 — not because a drawdown ratchet caught up with a peak, but because the day's own reference point moved with your profit.
4. A rough morning on day 2 takes equity to $49,300 before you close the position. Daily loss limit breached — on an account that is still $2,700 above where it opened five days earlier.

The allowance itself was $2,500 on day 1 and $2,500 on day 2 — identical. What moved was the opening point it's subtracted from, and that is recalculated every single trading day, win or lose.

The rule as arithmetic

Collapsed to one line, the daily floor for any given trading day is:

The second term is a constant for the whole evaluation — it is fixed the moment the account is funded and never recomputed against a bigger or smaller balance. The first term changes every day. That is the whole rule: a constant-length allowance, re-anchored daily to wherever the account's equity opened.

Our corpus's reading is that the check runs on equity, not on closed-trade balance — a floating, unrealized loss on an open position counts against the day's allowance before the trade is ever closed. That reading is recorded as derived from FTMO's published language rather than quoted verbatim, because FTMO states it plainly for the overall Maximum Loss rule but less explicitly for the daily one.

The one thing FTMO's documentation does not settle

FTMO states the trading day "recalculates daily at 00:00 CE(S)T." That single sentence is precise about the local clock and imprecise about UTC, because Central European time shifts with daylight saving: 00:00 CET (winter) is 23:00 UTC the day before, and 00:00 CEST (summer) is 22:00 UTC the day before — a one-hour difference that can matter to a trade held into the last hour of the session. FTMO's own materials do not state which convention governs, or whether the platform's reset time itself shifts with the clock change. Our corpus previously held two different UTC values for what turned out to be the identical published sentence; it now records the field as an open ambiguity rather than resolving it silently, with the conservative reading — 23:00 UTC — carried in the engine's modeling notes.

The daily loss limit, by mechanic

"Daily loss limit" is not one mechanic across firms. What we've verified directly for the three rule sets covered on this page differs structurally, not just by percentage:

SCROLL →

Rows are transcribed from each firm's own published documentation, dated on the rule changelog. FTMO's overall Maximum Loss (10% on the 2-Step, also 10% on the 1-Step) is a separate rule from the daily one: it is static, anchored once to the initial balance for the whole evaluation, and never recalculates the way the daily floor does — the two rules on the same account move on entirely different schedules.

What changes the odds under this mechanic

These are properties of the rule, not recommendations. What any of them is worth for a given trader is a number the engine simulates from that trader's own statistics.

• Risk per trade against a fixed allowance. Because the dollar amount never grows with the account, risk per trade sets how many independent losing days the allowance can absorb — and that ratio is fixed for the whole evaluation, not eased as the account grows.
• Floating exposure during the day. If the check runs on equity, a single open position that moves against you spends the day's allowance before you decide whether to close it.
• Days where the account opens up. A day that opens above the initial balance has a floor above the initial balance too — the allowance is the same $2,500, but it's measured from a higher line, so the account's cushion to the daily floor and its cushion to the (static) overall Maximum Loss are two different numbers that happen to move independently.
• Knowing the number before the fee. A simulated pass probability under this rule is derivable from win rate, average R and risk size. The engine simulates yours, locally, before the fee leaves your card.

Questions traders actually ask

Companion reads: FundedNext's consistency rule, which raises the target instead of failing the pass · MyFundedFutures' daily loss limit, which only exists on one account size · Topstep's 50% consistency rule, explained with the math.

PropSurvival is independent analytical software and is not affiliated with, endorsed by, or sponsored by FTMO. "FTMO" is used here only to identify the rule set being described. Rule descriptions are transcribed from the firm's published documentation on the date shown above; firms change rules without notice, and the firm's own documentation is always the final authority. Nothing on this page is investment advice, trading advice, or a recommendation to purchase any evaluation program. Every figure the engine produces is a simulation over user-supplied inputs and transcribed rules, under the assumptions stated in the methodology — not a prediction of any actual account's outcome.