What Is FTMO Firm and How Does It Work?

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 What Is FTMO Firm and How Does It Work?

FTMO is a prop trading firm that provides funding for forex traders. Instead of trading with your own capital, you trade with FTMO’s money. To get started, you need to pass their challenge and verification.

The Challenge

The challenge lasts for 30 days. You get a demo account with $100,000 in virtual funds to prove you can trade profitably. The rules are:

  • Maximum daily loss of $5,000
  • No more than 3 daily losses in a row
  • Minimum 10 trading days
  • Net profit of at least 5% at the end of the challenge

If you pass, you earn an evaluation account with $100,000 in real funds to continue trading.

Verification

The verification phase lasts 60 days. The rules are similar but with a minimum profit target of 10% to withdraw any profits. If you reach the target, you get to keep 70% of the profits. You can withdraw up-to $10,000 per month and $200,000 per year tax-free!

The key is to stick to your proven trading strategy. FTMO provides the capital, so you can focus on executing your strategy without worrying about the risks of trading your own money. By passing the challenge and verification, you prove to FTMO your skills and discipline as a trader.

Why Trade with FTMO?

There are a few benefits of trading with FTMO:

  • Trade with a large capital of $100,000 without the risks. 
  • Keep 70% of the profits with no monthly fees. 
  • Gain valuable experience trading a large funded account. 
  • Build your trading resume and possibly attract investors. 
  • Opportunity to earn a good income from trading without needing a large capital to get started.

Overall, FTMO Broker provides an opportunity for new and experienced forex traders to trade with a substantial capital and earn profits with relatively low risks. If you gain the skills and discipline to pass their evaluation, it can be a pathway to becoming a professional funded trader.

Preparing for FTMO Verification

Understand the Rules

The first step to passing FTMO verification is understanding their rules and requirements inside out. Study the FTMO rulebook to know exactly what is allowed and what is not in terms of trading strategies, risk management, news trading, etc. Some key rules to keep in mind are: maximum daily loss of 10% of the account balance, no martingale strategies, and risk/reward ratio of at least 1:1.5. Following all the rules meticulously is the only way to pass verification.

Develop a Robust Strategy

You need to develop a well-defined trading strategy that fits within FTMO’s rules and have a proven edge in the markets. The strategy should have clear entry and exit rules and be robust enough to handle the volatility of live markets during the verification phase. It is a good idea to thoroughly backtest your strategy over a long period of time to determine its viability. You can then optimize it based on your findings before using it for the live challenge.

Start with a Demo Account

Practice your trading strategy in the demo account until you achieve consistent profitability over at least 2-3 months. This will help you get familiar with the mechanics of live trading and build your confidence. Make sure your key metrics in the demo account like risk/reward ratio, win rate, maximum drawdown, etc. are in line with FTMO’s rules. Only switch to a live account once you have demonstrated consistent success in the demo.

Risk Management is Key

Robust risk management is the key to passing FTMO verification. Never risk more than 1% of your account on any single trade. Set a maximum daily loss limit of 10% as per FTMO’s rules. Use stop losses for all your trades and trail them as the trade moves in your favor. Risk or reward ratio of at least 1:1.5 is a must. With prudent risk management, you can pass verification even with a relatively low win rate.

If you follow these steps diligently, develop a strategy suited for the live markets, and manage your risks properly, you stand a very good chance of passing the FTMO verification and earning a lucrative income as a proprietary trader. Stay disciplined, learn from your mistakes, and keep at it!

Deposit Money Method

To fund your FTMO account, you’ll need to deposit money through their preferred payment methods. The minimum deposit amount is $2,800 for the FTMO Challenge and $25,000 for the Verification. Wire transfer The fastest way to deposit funds is through a wire transfer directly to FTMO’s bank account. This method typically takes 1-2 business days for the money to appear in your FTMO account. You’ll need to provide details like the IBAN number, SWIFT code, and account number found in your FTMO profile to send the wire from your bank.

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Credit/Debit card

You can deposit money into your FTMO account using via Revolut Visa or Mastercard credit or debit card. Deposits are credited instantly in your account so you can start trading right away. FTMO does charge a 5% fee for card deposits to cover the costs from their payment processor. If the fee bothers you, a wire transfer is a cheaper option.

E-wallets

Popular e-wallets like Skrill and Neteller are also accepted for deposits. Money from e-wallets is credited to your FTMO account instantly but e-wallets also charge small fees for adding and withdrawing funds. These e-wallets offer convenience but for larger deposits, a wire transfer may save you more in fees.

Once your funds have been deposited and are showing in your FTMO account balance, you’re ready to begin the Challenge or Verification phase. Passing the Challenge qualifies you for a funded account where you can keep 100% of the profits. The Verification requires a higher deposit but also provides a bigger account balance if you’re successful.

With multiple deposit options, funding your FTMO account is quick and straightforward. Choose method that suits your needs and timeline to get started on your evaluation as soon as possible. Keep in mind any fees that apply so more of your money goes directly into your trading account.

Passing the FTMO Challenge: Tips and Strategies

To pass the FTMO challenge and verification, you need to prove you can trade profitably and consistently over a certain period of time. The key is to stick to a solid trading plan and risk management strategy.

Have a Trading Plan and Strategy

The foundation of successful trading is having a well-defined trading plan and strategy. Figure out what markets and timeframes you want to trade, and develop a set of rules to identify, enter, and exit trades. Some things to consider include:

  • What technical indicators do you use? Look for simple indicators that complement each other, like moving averages, support/resistance levels, and candlestick patterns.
  • How will you determine optimal entry and exit points? Use limit orders and stop-losses to control your risk.
  • What is your risk-reward ratio for each trade? Aim for at least 1:2 so you can still profit even if some trades lose money.
  • How will you manage your money and position sizes? Only risk a small percentage of your account on each trade.

Practice Strict Risk Management

Even the best trading strategies will not always be profitable. The key is managing your risk so losing trades do not wipe out your account. Some tips:

  • Only risk 1 to 3% of your account on any single trade. That way, a losing streak will not cripple your account.
  • Always use stop-losses to limit losses. Place them below support levels or recent swing lows.
  • Move your stop-loss to breakeven once a trade becomes profitable. That ensures you lock in profits and the worst outcome is a small loss.
  • Take profits regularly as trades move in your favor. Do not get greedy hoping for bigger gains.
  • Avoid overtrading at all costs. Only take the best trading opportunities that match your strategy.

If you exercise strict risk control and discipline, you will set yourself up for passing the FTMO challenge and becoming a funded trader. Follow your trading plan, focus on high probability setups, use tight stop-losses, and take profits off the table regularly. Do that, and the profits will follow!

Withdrawing Your Profits After Passing Verification

After you’ve successfully passed the FTMO Challenge and Verification stage, it’s time to start earning real money. FTMO will deposit $100,000 into your account for you to trade with over the next 6-12 months.

Meeting the Profit Target

To withdraw your profits, you need to generate a minimum of 10% profit from your initial $100,000 balance. That means making at least $10,000 in net profit. FTMO calculates your profit based on the percentage gain from your initial deposit, not the highest balance achieved. So if your account balance reaches $150,000 but then drops to $120,000, your profit is still $20,000 or 20% of $100,000.

Withdrawing Funds

Once you’ve met the minimum profit target, you can withdraw your funds. FTMO processes withdrawal requests within 3 business days. You have two options for withdrawing profits:

  • Full Withdrawal: Withdraw your entire account balance, including your initial $100,000 deposit and all profits. After a full withdrawal, your account will be closed.
  • Partial Withdrawal: Withdraw only a portion of your profits while keeping your initial $100,000 deposit in your account to continue trading. You must withdraw a minimum of $10,000 for each partial withdrawal. There is no limit to the number of partial withdrawals you can make.

To request a withdrawal, log in to your FTMO account and submit a withdrawal request for the amount you want to withdraw. Funds will be paid out via the same method you used to fund your initial deposit.

With FTMO, generating consistent profits from trading has never been more rewarding. Their verification program ensures only the most skilled traders are able to withdraw money from their funded accounts. If you can prove yourself, the potential profits are huge. Keep up the good trading!

FTMO Broker FAQs: Common Questions About the Platform

So you’ve heard about FTMO Broker and are interested in learning more about how it works. As with anything new, you probably have some questions. Here are some of the most common questions people have about FTMO Broker and the answers to help you decide if it’s right for you.

 

What exactly is FTMO Broker?

FTMO Broker is a proprietary trading firm that provides funded trading accounts to qualified traders. They supply the capital, you supply the trading skill. If you pass their evaluation, you get to trade with their money and keep a generous percentage of the profits.

How does the FTMO challenge work?

The FTMO challenge is a way for FTMO Broker to evaluate your trading ability. If you meet their criteria during the challenge, you’ll win a funded trading account. The challenge lasts 10 days and you need to generate a minimum profit of 10% with a maximum loss of 5%. You can take the challenge as many times as needed to qualify.

What’s the verification phase?

Once you pass the challenge, you enter the verification phase which lasts 30 days. You need to make an additional 10% profit to verify your trading skill. If successful, you’re awarded a funded trading account with a balance of $100,000 to $200,000 to trade with. You keep 80% of the profits and FTMO Broker takes 20%.

Can I withdraw money from my account?

Yes, once your account is verified you can withdraw profits at any time. Withdrawals are processed within 5 business days. The minimum withdrawal amount is $500. Keep in mind that FTMO Broker’s cut of your profits is automatically deducted, so you’re always withdrawing your 80% share.

Do I have to pay anything to trade with FTMO Broker?

No, FTMO Broker does not charge any upfront fees to take their challenge or trade a funded account. They make money by taking 20-30% of the profits from funded accounts. If you don’t generate a profit, they don’t make any money either. So, their model is based on your success as a trader.

 

About Writer

The Prop Firm Trader
The Prop Firm Trader
Welcome to The Prop Firm Trader, where our mission is to empower traders in the dynamic world of online proprietary firms. With a surge in the popularity of these trading enterprises, it's crucial to navigate this landscape with confidence and knowledge. At Prop Firm Trader, we understand the challenges traders face, from legitimate concerns to the more nefarious activities within the industry. For any inquiries or assistance, feel free to reach out to us at infothepropfirmtrader@gmail.com.

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