FTMO Drawdown Rules 2026: 5% Daily Loss & 10% Max Loss Explained

Quick Summary: How FTMO Calculates Drawdown in 2026

Unlike futures prop firms or instant-funding programs that use trailing equity floors, FTMO uses a static 10% Maximum Loss anchored permanently to your initial starting balance, paired with a 5% Maximum Daily Loss that resets every day at midnight CE(S)T (Prague time). Both limits include closed trade results, floating (unrealized) open P&L, commissions, and overnight swaps.

Rule 1: The 5% Maximum Daily Loss Formula (And the Midnight Floating Profit Trap)

According to FTMO's official Trading Objectives, your Maximum Daily Loss is fixed at 5% of the initial account balance ($5,000 on a $100,000 account). At 00:00 CE(S)T each trading day, the daily loss counter resets.

The exact formula FTMO uses is:

Because the 5% daily allowance ($5,000 on a $100K account) is measured from your closed balance at midnight CE(S)T plus any open floating profit carried across midnight, carrying an unrealized winning trade past midnight creates a well-known risk trap:

Worked Example: Carrying an Open Winner Past Midnight CE(S)T

Suppose you trade a $100,000 FTMO Challenge (daily loss limit = $5,000):

1. Day 1 (Before Midnight): Your closed balance is $100,000, and you hold an open EUR/USD swing trade with +$4,000 unrealized floating profit (current equity = $104,000).
2. Midnight CE(S)T Rollover: You leave the trade open past midnight. That +$4,000 floating gain is still part of your current open P&L for Day 2.
3. Day 2 Intraday Pullback: During the London session, EUR/USD reverses before hitting your take-profit, turning your open position from +$4,000 into -$1,100 (a -$5,100 intraday swing from midnight equity).
4. Result — Hard Breach: Even though your account equity is $98,900 (only 1.1% below your initial $100,000 starting balance), your Day 2 floating P&L dropped by $5,100 from where it stood at midnight ($104,000 - $5,100 = $98,900), breaching the $5,000 Maximum Daily Loss limit.

Practical takeaway: If you carry a large unrealized floating profit approaching midnight CE(S)T on FTMO, closing and banking the profit before 00:00 CE(S)T locks it into closed balance so your full $5,000 daily buffer applies cleanly to the next session. You can model this exact rollover math using our Interactive Drawdown Calculator.

Rule 2: The 10% Static Maximum Loss

FTMO's overall Maximum Loss rule states that your account equity or balance must never fall below 90% of the initial account balance at any moment during the evaluation or funded stage.

• On a $100,000 account: The hard floor is permanently fixed at $90,000.
• If you grow the account to $108,000: Your overall Maximum Loss floor remains at $90,000, giving you an $18,000 total cushion against overall breach (though you are still subject to the $5,000 daily loss limit on any single calendar day).
• Once you request and withdraw a reward on an FTMO Account (see our FTMO Payout Rules 2026 guide), your account balance resets back to the initial $100,000 baseline, so keeping a buffer above $100,000 is only maintained while profits remain in the account.

Standard FTMO vs FTMO Swing: News and Weekend Rules

While both account types share the identical 5% daily / 10% static maximum loss percentages, your choice between FTMO Standard and FTMO Swing at checkout dictates how you manage overnight and macroeconomic risk:

Multi-Provider Comparison: How Other Static-Drawdown Prop Firms Compare

If you want static maximum drawdown rules without FTMO Standard's two-minute news restriction or higher €540 ($100K) upfront fee, compare how The5ers, FunderPro, and BrightFunded structure their loss floors:

• The5ers uses a daily pause rather than an immediate hard account termination on certain evaluation events, and its High Stakes 2-Step requires an 8% Phase 1 target instead of FTMO's 10%.
• FunderPro offers both One-Phase and Two-Phase (Classic) challenges with a static maximum drawdown floor anchored to starting balance and supports TradeLocker, cTrader, and MT5.
• BrightFunded matches FTMO's 5% daily / 10% static structure on its 2-Step plans while offering broad crypto CFD coverage and scaling up to a 100% reward split.
• You can also compare FTMO against FundedNext in our FTMO vs FundedNext 2026 comparison and FundedNext Drawdown Rules guide.

FTMO Drawdown Rules: Your Questions Answered

Is FTMO's 10% maximum drawdown static or trailing?

FTMO's 10% Maximum Loss is 100% static. On a $100,000 account, the maximum loss floor stays locked at $90,000 for the entire life of the account and never trails upward as you make profits.

Does FTMO's 5% daily loss include floating (unrealized) losses?

Yes. Both closed trades from the current CE(S)T calendar day and open floating P&L (including commissions and overnight swaps) count toward the 5% Maximum Daily Loss in real time.

What time does the FTMO daily drawdown reset?

FTMO resets the Maximum Daily Loss counter every day at 00:00 CE(S)T (Central European Time / Central European Summer Time, which corresponds to Prague local time).

What happens if I hold an open winning trade across midnight on FTMO?

If you hold an open floating profit across midnight CE(S)T, your maximum daily loss allowance for the new day is still 5% of your initial balance ($5,000 on a $100K account) measured relative to the midnight equity snapshot. If that open floating profit reverses by more than $5,000 during the new day, it will trigger a daily loss breach even if your equity remains above your initial starting balance.

Related Prop Firm Guides

• FTMO Payout Rules 2026: Reward Split, 14-Day Cycle & Scaling Plan
• FTMO vs FundedNext 2026: 2-Step Rules, Price and Payouts
• FundedNext Drawdown Rules 2026: Balance vs Equity Reset Explained
• Interactive Drawdown Calculator: Model Static vs Trailing Limits
• Side-by-Side Comparison Tool: Compare Prop Firm Rules & Fees