Risk Calculator for FTMO Traders: Pass the Challenge, Keep the Account

FTMO rejects roughly 90% of challenge attempts — and the majority of failures are not caused by bad trade ideas. They are caused by oversizing one position during a drawdown streak, breaching the 5% daily loss limit on a volatile NFP Friday, or grinding toward a profit target so aggressively that a single reversal ends the account. The math is the problem, not the market read.

FTMO operates under hard, asymmetric rules: breach the daily loss limit once and the challenge is void — no second chances, no partial credit. The profit target on a Phase 1 challenge is 10%, but the ceiling on daily loss is 5% and max drawdown is 10%. That ratio demands surgical position sizing on every single trade, not just the ones that feel risky.

This page gives FTMO traders a precise framework for calculating risk per trade, managing cumulative drawdown across a session, and sizing positions that keep all three rule boundaries intact simultaneously. There is also a ready-to-use AI prompt for dynamic sizing scenarios at different account stages.

The Three FTMO Rules That Dictate Every Position Size

FTMO’s evaluation is governed by three numeric thresholds that interact. The 10% profit target for Phase 1 defines the upside goal. The 5% daily loss limit defines the maximum single-session drawdown from the account balance at the start of that day — not from peak equity. The 10% maximum overall drawdown is calculated from the initial account balance. These numbers create a corridor that your sizing must stay inside every day.

The daily loss limit is the most dangerous rule because it resets each day and can be breached on any session independently of your cumulative P&L. A trader who is up 7% overall can still fail the challenge by losing 5.1% in a single trading day. This means your per-trade risk is not just a function of account size — it is a function of how many trades you plan to take that day and what your current intraday drawdown already is.

Before placing any trade, three numbers must be live in your head: remaining daily loss budget (5% minus intraday losses already taken), remaining overall drawdown buffer (10% minus total losses from starting balance), and distance to profit target. Position size is the output of those three inputs, not a fixed percentage you apply mechanically.

• Phase 1 profit target: 10% — minimum 4 trading days
• Phase 2 profit target: 5% — minimum 4 trading days
• Daily loss limit: 5% of balance at start of that day
• Max drawdown: 10% from initial account balance (not trailing)
• No minimum trading days required for funded accounts
• Scaling plan available once funded: 25% profit share → 80/20 split

How to Calculate Position Size for an FTMO Account

The core formula is straightforward: Risk Amount ÷ Stop Loss in Pips × Pip Value = Lot Size. On a $100,000 FTMO account, if you risk 0.5% per trade ($500) with a 20-pip stop on EUR/USD (pip value ≈ $10 per standard lot), the calculation is $500 ÷ (20 × $10) = 0.25 lots. That keeps you well inside daily limits if you take three to four trades and all stop out.

The problem most FTMO traders encounter is that they do not recalculate after losses. If you lose $300 on the first trade, your remaining daily budget is $200 — not $500. The second trade must be sized against $200, not the original daily allocation. This dynamic recalculation is what separates traders who pass from traders who blow the daily limit on trade three after two small losses.

Volatility also changes pip value in practice. On a news event, a 20-pip stop may not be structurally valid — price can gap through it. On high-volatility sessions, either widen the stop and cut lot size proportionally, or sit out the event entirely. FTMO does not compensate for slippage on stop-losses.

You are a prop firm risk manager helping an FTMO trader size positions correctly.

Account: $100,000 FTMO Phase 1
Current intraday P&L: -$180
Daily loss limit remaining: $320
Overall drawdown used: $600 of $10,000 max
Profit target remaining: $8,200

Trade setup: EUR/USD long, entry 1.0850, stop 1.0820 (30 pips), target 1.0910 (60 pips)
Pip value standard lot EUR/USD: $10

Calculate: maximum lot size respecting daily limit, recommended lot size at 1% risk, R:R ratio, and whether this trade moves the needle meaningfully toward the profit target. Flag if the setup is inadvisable given current drawdown state.

Daily Loss Limit Management Across a Multi-Trade Session

Most FTMO failures happen in sequences, not single trades. A trader loses 1.5% on a morning setup, re-enters frustrated and loses another 2%, then takes a revenge trade that clips the final 1.5% before noon. Three trades, five minutes of bad decision-making, challenge over. The daily limit does not care about intent — only the number.

A practical session structure for FTMO: divide your daily risk budget into three tranches. Use no more than 40% of the daily budget on the first trade block (morning session), hold 40% for a second distinct setup window, and keep 20% in reserve as a buffer against slippage or gap risk. If the first tranche is consumed without a winning trade, stop for the day. The challenge is a minimum 4-day instrument — you cannot afford to compress failure into a single session.

Use a hard rule: if intraday loss reaches 3% (60% of the 5% daily limit), trading stops for that calendar day regardless of how good the next setup looks. This single protocol keeps the daily limit breach rate near zero even during losing streaks.

• Tranche 1 (40% of daily budget): First session trade block, cut if lost
• Tranche 2 (40% of daily budget): Second distinct setup window only
• Reserve (20%): Buffer for slippage, news events, gap risk
• Hard stop rule: halt trading if 3% intraday drawdown is reached
• Log every trade with entry, exit, lot size, and remaining daily budget
• Never increase lot size after a loss to ’recover’ — that is how challenges end

Sizing Toward the Profit Target Without Blowing the Max Drawdown

Phase 1 requires a 10% gain in minimum 4 trading days — on a $100,000 account, that is $10,000. At 0.5% risk per trade with a 2:1 reward-to-risk ratio, you need roughly 10 winning trades net of losses to hit the target. That is achievable across 4 days without compressing risk into oversized positions. The math works if you let it.

Where traders miscalculate is the endgame: when they are $1,200 short of the target on the final day, they upsize to finish. That single session might risk 3-4% chasing the last 1.2% needed — an asymmetric and unnecessary gamble. The correct move is to size normally, accept that the target may take one additional trading day, and protect the account. FTMO does not penalize you for taking an extra day.

Track your profit-target proximity as a ratio, not a dollar figure. If you need 1.2% more profit and have 4% of max drawdown remaining, you have three standard-risk trades worth of room. That framing prevents panic-sizing on the final stretch.

Instrument-Specific Risk Adjustments for FTMO Accounts

FTMO allows trading across forex majors, indices, commodities, and crypto — each with different pip values, margin requirements, and volatility profiles. A 30-pip stop on EUR/USD at 0.25 lots risks $75. The same 30-point stop on US30 (Dow Jones) at 0.25 lots risks approximately $187.50 because the point value is different. Treating stops and lot sizes as equivalent across instruments is a guaranteed way to accidentally exceed daily risk limits.

Indices and commodities carry higher overnight risk. FTMO accounts can hold positions overnight, but commodity spreads widen significantly at session close and indices can gap on futures rollovers. If you are holding NAS100 or XAUUSD overnight, factor gap risk into your effective stop distance — add a buffer of 20-30% to the nominal stop when calculating lot size.

Crypto on FTMO (BTC, ETH) has the widest spreads and the most volatile price action. Standard risk models underestimate true exposure on crypto. A practical rule: cut your standard lot size by 30-40% on crypto pairs relative to what you would trade on a major forex pair with the same nominal stop distance.

• EUR/USD: ~$10 per pip per standard lot — baseline instrument
• GBP/USD: ~$10 per pip — similar to EUR/USD, wider spreads
• US30 (Dow): ~$1 per point per mini lot — recalculate per instrument
• NAS100: ~$1 per point per mini lot — higher intraday volatility
• XAUUSD (Gold): ~$1 per point per 0.01 lot — large point moves
• BTC/USD: Apply 30-40% lot size reduction vs. forex equivalents

Building a Repeatable FTMO Risk Checklist

Consistency across challenge phases is the actual edge. Traders who pass FTMO reliably are not necessarily better analysts — they are more systematic about pre-trade checks. A five-point checklist executed before every trade eliminates the majority of rule-breach scenarios.

The checklist must be non-negotiable: it runs before every single trade entry, including re-entries after a winning trade. A winning trade does not grant permission to skip the check. Overconfidence after a win is statistically one of the highest-risk moments in a trading session.

After passing Phase 1 and Phase 2, the same checklist applies on the funded account — with one addition: track the scaling plan milestones. FTMO’s scaling plan increases allocation when a trader generates 10% profit over four months with a maximum 10% drawdown. Protecting that milestone is worth more than any single aggressive trade.

Act as an FTMO risk compliance assistant. Before I enter this trade, run the following checklist and flag any violation:

Account stage: FTMO Phase 1, Day 6
Account balance: $102,400 (started at $100,000)
Intraday P&L so far: -$210
Daily loss limit: 5% of $102,400 = $5,120
Max drawdown limit: $90,000 floor (10% of initial $100,000)

Proposed trade: Short GBP/USD, 0.50 lots, stop 25 pips above entry, target 50 pips below entry
Current GBP/USD pip value: $5 per pip per 0.10 lot

Checklist to run:
1. Does this trade breach the remaining daily loss budget if stopped out?
2. Does a stop-out bring the account below the max drawdown floor?
3. Is the R:R ratio at minimum 1:1.5?
4. Is lot size appropriate given intraday loss already incurred?
5. Confirm or reject the trade with exact numbers.