How to pass a prop firm challenge (FTMO, FundedNext and similar)

Most traders don't fail a challenge for lack of strategy but for risk management: a bad streak, a revenge-trading day or a lot that's too big. The rules are designed to catch exactly that.

The three rules that decide everything

Read your firm's exact terms: they change often, and details like whether open positions count toward the daily loss make a difference.

• Profit target: usually 8–10% in phase 1 and 5% in phase 2.
• Max daily loss: typically 4–5% of the starting balance, measured from the balance (or equity) at the start of the day.
• Max total loss: 8–10% from the starting balance (static) or from the peak (trailing), depending on the firm.

How much to risk per trade

It's the most important decision. With a 10% max loss, risking 2% per trade means 5 losses in a row knock you out, and anyone gets five losses in a row. At 0.5% you need 20.

On the other hand, too little risk takes forever to reach the target. The sweet spot depends on your win rate and R:R: for most traders it's between 0.5% and 1%.

Personal rules that save the challenge

• Stop trading for the day after 2 losses or after losing half the daily limit.
• Don't trade the minutes around high-impact news on your pairs.
• Never size up to recover: it's the fastest way to fail.
• Close to the target, reduce risk: you don't need to get there in one trade.

Check it with your data before paying

The best way to know whether you'd pass is to run your real history through the challenge rules. Katanith does it with the “Would you pass the challenge?” simulator: it takes your trades, simulates starting the challenge on every day of your history and tells you how often you'd have passed with each firm, in how many days and with which risk you'd pass most.

No history yet? The free challenge-odds calculator estimates your chances from your win rate and R:R.

After you pass

The funded account has the same rules. Keep the same risk and process that got you through, and keep journaling exactly as during the challenge: discipline is what makes the account last.