FTMO 1-Step vs 2-Step Drawdown Rules (2026): Daily Loss and Maximum Loss Explained

FTMO 1-Step vs 2-Step Drawdown Rules (2026)

FTMO's 1-Step and 2-Step Challenges both advertise a 10% Maximum Loss, but the risk models are not the same. The 1-Step route has a tighter 3% Maximum Daily Loss and an end-of-day trailing Maximum Loss. The 2-Step route allows a 5% Maximum Daily Loss and keeps the 10% Maximum Loss static.

That difference changes how much room a trader has after profitable days, how overnight positions should be managed, and which number matters most during a drawdown.

This guide uses FTMO's official Trading Objectives, FAQ and product pages checked on August 28, 2026. For a full company overview, see the FTMO review on Prop Firm Audit.

FTMO 1-Step vs 2-Step: Quick Rule Comparison

The headline “10% Maximum Loss” therefore does not tell the whole story. A static 10% floor and an EOD-trailing 10% floor behave very differently once an account has made profit.

What FTMO Counts in a Loss-Limit Calculation

FTMO evaluates equity, not only closed balance. Its published formula includes:

• account balance;
• open-position profit or loss;
• swaps;
• commissions.

A breach can happen while a position is still open. If equity touches the prohibited side of the active limit for even a brief moment, closing later at a profit does not undo the violation.

This is why a trader should not set a stop exactly at the remaining loss allowance. Commission, swap, spread expansion and slippage can push equity beyond the threshold.

FTMO Maximum Daily Loss Explained

Maximum Daily Loss is the minimum equity level the account must stay above during the current FTMO day. FTMO recalculates the threshold at 00:00 CE(S)T.

The general formula is:

Daily equity limit = balance recorded at 00:00 CE(S)T − daily loss amount

The daily loss amount is always a percentage of the initial simulated capital, not a percentage of that morning's balance.

1-Step Maximum Daily Loss

For 1-Step, the Maximum Daily Loss amount is 3% of initial simulated capital.

On a $100,000 account:

• daily loss amount: $3,000;
• Day 1 limit: $97,000;
• if the next midnight balance is $102,000, the next day's limit becomes $99,000;
• if a later midnight balance is $101,000, that day's limit becomes $98,000.

The limit can move both up and down because it is recalculated from the balance at each reset. However, the separate EOD-trailing Maximum Loss can only move upward, so a lower daily limit never restores room already removed by the trailing overall floor.

2-Step Maximum Daily Loss

For 2-Step, the Maximum Daily Loss amount is 5% of initial simulated capital.

On a $100,000 account:

• daily loss amount: $5,000;
• Day 1 limit: $95,000;
• if midnight balance is $102,000, the next day's limit is $97,000;
• if the following midnight balance is $101,000, the new daily limit is $96,000.

This rule applies during the Challenge, Verification and the subsequent 2-Step FTMO Account.

Midnight Reset Risk

The reset can surprise traders holding open positions. Consider a $100,000 2-Step account that begins the day with a $102,000 balance. Its daily floor is $97,000.

If the trader has a $2,000 floating profit shortly before midnight, equity is $104,000. After the reset, the balance used by the formula remains the closed balance of $102,000, not the floating equity peak. The new daily floor is still calculated from the midnight balance, while the open trade may reverse afterward.

A more dangerous case occurs when closed profit accumulated earlier in the day raises the reset balance but an open position carries a floating loss. The next day's floor can rise even though current equity is already lower.

Before holding through 00:00 CE(S)T, calculate:

1. expected midnight balance;
2. the new daily floor;
3. current floating P/L;
4. swaps charged at rollover;
5. remaining buffer after costs.

FTMO provides a timezone converter in the Client Area because daylight-saving changes affect the local-clock equivalent of CE(S)T midnight.

1-Step Maximum Loss: End-of-Day Trailing

The 1-Step Maximum Loss amount is 10% of initial simulated capital, but the threshold trails the highest qualifying end-of-day balance.

For a $100,000 account:

• initial Maximum Loss floor: $90,000;
• if the highest balance recorded at midnight becomes $104,000, the floor rises to $94,000;
• if balance later closes at $102,000, the floor stays at $94,000;
• it never moves back down during that account cycle.

FTMO calculates the threshold from the higher of initial simulated capital or the highest balance recorded at 00:00 CE(S)T, minus $10,000.

This is less aggressive than an intraday equity-trailing model because open profit alone does not move the overall floor. It is still materially tighter after profitable days because closed end-of-day gains permanently raise the limit.

Reward Reset on 1-Step

FTMO states that when a Reward is withdrawn and a new 1-Step FTMO Account is provided, the Maximum Loss limit fully resets. The new account's first-day limit returns to 90% of initial simulated capital.

This is an important distinction from assuming the old trailing floor follows the trader forever. The active account and reward-cycle terms control the current threshold.

2-Step Maximum Loss: Static

The 2-Step Maximum Loss is also 10% of initial simulated capital, but it is static.

For a $100,000 account, equity must never fall below $90,000. Profitable days do not move that floor upward.

If the account balance grows to $110,000, the trader has a larger absolute buffer above the static floor. That does not change Maximum Daily Loss, which is separately recalculated every day from the midnight balance.

The static structure can suit traders who want accumulated profit to become a durable drawdown cushion. The trade-off is having to complete two phases and meet four minimum trading days in each phase.

Why 1-Step Can Become Tighter After Profit

Suppose a 1-Step trader closes Day 1 at $106,000 on a $100,000 account.

At the next reset:

• Maximum Daily Loss floor: $106,000 − $3,000 = $103,000;
• Maximum Loss floor: $106,000 − $10,000 = $96,000.

The daily floor is the active tighter constraint for that day. The account cannot simply lose the entire $6,000 gain because the 3% daily rule protects only a $3,000 band below the new midnight balance.

After a later losing close, the daily threshold may fall, but the EOD-trailing overall floor remains $96,000.

The practical lesson is that 1-Step rewards steady gains but does not allow a trader to treat yesterday's profit as freely riskable today.

Why 2-Step Has More Daily Room

On the same $100,000 starting size, 2-Step gives a $5,000 daily loss amount instead of $3,000. It also keeps the overall floor fixed at $90,000.

That larger room can better accommodate strategies with wider stops or multiple intraday setups. It does not mean risking 5% is sensible. A trader who regularly approaches the official limit has little allowance for slippage, correlated positions or execution costs.

FTMO has publicly described 1% to 1.5% per position as a risk-management recommendation, not a formal restriction. A personal limit well below the rule creates operational safety.

Best Day Rule on FTMO 1-Step

The 1-Step Challenge and subsequent 1-Step FTMO Account use a 50% Best Day Rule.

A trader's most profitable closed trading day cannot represent more than 50% of the sum of profits from all positive days when passing or requesting a Reward.

Example:

• Best Day: $6,000;
• other positive days combined: $3,000;
• Positive Days' Profit: $9,000;
• Best Day percentage: 66.7%.

This does not immediately breach the account. The trader must continue generating positive-day profit until the $6,000 Best Day represents 50% or less of the total. With that Best Day unchanged, Positive Days' Profit must reach at least $12,000.

Because of this rule, the theoretical fastest 1-Step pass is two profitable trading days with no day contributing more than half of positive-day profit.

2-Step Minimum Trading Days

The 2-Step route requires at least four trading days in the Challenge and four more in Verification. The days do not need to be consecutive.

FTMO defines a trading day by CE(S)T: at least one position must be opened between 00:00:00 and 23:59:59. Reaching the target earlier does not remove the minimum-day requirement.

There is no maximum time limit, so traders do not need to force trades merely to finish within a subscription month.

Standard vs Swing Position Holding

During either evaluation, FTMO permits overnight and weekend holding regardless of Standard or Swing selection.

Restrictions change on an FTMO Account:

• Standard accounts must close before the weekend or a market break longer than two hours;
• Swing accounts can hold overnight and through weekends;
• Swing is available only through the 2-Step Challenge;
• a Standard selection cannot be converted to Swing later.

News restrictions also differ by account type and stage. On applicable Standard FTMO Accounts, selected announcements restrict opening or closing targeted instruments from two minutes before until two minutes after release. Swing accounts are designed for traders needing broader holding and news flexibility, subject to forbidden-practice rules.

Common FTMO Drawdown Mistakes

Watching Balance Instead of Equity

A positive closed balance does not protect an account from a floating-loss breach.

Ignoring Commissions and Swaps

A stop placed exactly at the theoretical threshold can still violate the rule after transaction costs.

Confusing Daily and Overall Floors

Both rules apply simultaneously. The higher equity floor is the effective constraint at any moment.

Forgetting the Midnight Recalculation

A position safe before 00:00 CE(S)T may have less room immediately after the reset.

Treating Profit as a New Risk Budget

On 1-Step, profitable end-of-day balances raise the overall trailing floor. On both products, a higher midnight balance also raises the next daily floor.

Which FTMO Route Fits Which Trader?

1-Step May Fit Traders Who

• want one evaluation phase;
• can operate comfortably inside a 3% daily limit;
• produce profits across multiple positive days;
• understand EOD-trailing maximum loss;
• prefer a 90% initial Reward share.

2-Step May Fit Traders Who

• want a wider 5% daily band;
• prefer a static 10% overall floor;
• can complete two profit-target phases;
• need the Swing account option;
• value building a larger cushion above a fixed Maximum Loss floor.

The faster route is not automatically the easier route. Strategy volatility and risk distribution matter more than the number of phases.

Practical Risk Checklist

Before every session:

1. record the current Maximum Daily Loss floor;
2. record the Maximum Loss floor;
3. use the higher number as the binding equity threshold;
4. subtract commissions, swaps and a slippage allowance;
5. total risk across correlated open positions;
6. recalculate before the CE(S)T midnight reset;
7. keep a personal stop comfortably above FTMO's hard boundary.

Final Verdict

FTMO 1-Step offers a shorter path but uses tighter and more dynamic risk controls: 3% daily loss, EOD-trailing 10% Maximum Loss and a 50% Best Day Rule. FTMO 2-Step requires two phases but provides a 5% daily band and a static 10% maximum-loss floor.

For traders deciding between them, the key question is not “one phase or two?” It is whether the strategy can remain stable after the 1-Step limits rise with profitable closes. Traders who need wider daily room or want a static overall floor may find 2-Step more compatible, even though qualification takes longer.

Official sources checked August 28, 2026: [FTMO Trading Objectives](https://ftmo.com/en/trading-objectives/), [FTMO 1-Step](https://ftmo.com/en/1-step-challenge/), [FTMO 2-Step](https://ftmo.com/en/2-step-challenge/), [FTMO Comparison Table](https://ftmo.com/en/comparison-table/), [FTMO Maximum Daily Loss Academy](https://academy.ftmo.com/lesson/maximum-daily-loss/), and [FTMO Overnight and Weekend FAQ](https://ftmo.com/en/faq/do-i-have-to-close-my-positions-overnight-or-before-the-weekend/).