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 have 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 a 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/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.
Credit/Debit card
You can deposit money into
your FTMO account using a Visa or Mastercard credit/debit card. Deposits are
credited instantly 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 a
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 1-3% 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.
Conclusion
So there you have it! Now
you know all about FTMO and how it works. The challenge and verification
process seems tough, but with dedication and skill, it's possible for traders
to pass. And once you do, you've got a funded account and the potential to earn
great returns. Just be sure to manage your risk and trade your plan. With FTMO,
funded trading is within reach if you put in the time and effort. Ready to give
it a shot? Believe in yourself and go for it! You could be the next FTMO-funded
trader profiting in the markets.
