FTMO Account

FTMO is a demo only environment

All trades executed on FTMO platforms by all traders, whether on evaluation programs or as funded traders are not placed in the real market. No money is made and no losses are incurred. This is known in the business as running their own “book”.

FTMO are big enough to do this. They can afford to pay the winners directly out of their profits, especially given their very low success rate. This is therefore a loser pays the winner model, the many pay the very few.

Now, in reality does this matter to the client trader? Not really. For most traders, what matters is getting paid not who pays them. For the industry and new start-ups however this does create a problem.

Great Trading Can Ruin Demo Prop Firms

Counterintuitively it’s the upside that has the potential to ruin a prop trading firm. If many traders all have a great week and generate lots and lots of profit and want paying out then using our real money model, that profit really does exist and we can pay them. This protects us and our traders from “doing a Funding Talent”. 

Successful traders make us and themselves real money. It’s a partnership and we work hard to help our traders succeed, it’s in our interest to do so. Traders who come to us appreciate the difference.

If you want to know if a funded trading firm is running a “book” or placing you in the real market, ask them. If they are not making it clear on their website, then the chances are they are running a book. Check their terms and conditions, do your due diligence. 

I don’t think there is a single prop trader who’ll be happy to hear the prop firm hasn’t generated the funds to match their winnings.

Drawdown – Fixed drawdown versus trailing drawdown

We can fit the different drawdown models into 3 boxes: Static Drawdown, Trailing and Trailing then static.

Static Drawdown

The static drawdown method is used by FTMO. The maximum you can drawdown is fixed by the program and stays at the same rate. FTMO are able to use this method because they have such a high number of clients and besides because they give clients such high leverage the majority will breach this drawdown anyway, remember if only 1% get paid, 99% fail.

Trailing Drawdown

The trailing drawdown method is used by most of the Futures Prop Trading firms. This is where the allowed drawdown percentage moves up with successful trades at the same percentage distance as the equity of the account increases. This drawdown amount stays the same distance from the equity “high water mark” and the trader always has to trade above the drawdown level and cannot afford to increase risk as the account equity grows.

The FT+ Drawdown Method

At Funded Trading Plus we use the trailing then static method. Our drawdown starts at the same or similar level as FTMO but moves up as the trader makes profit in proportion to the profit. The amount of drawdown remains the same. As the trader increases the profit, the drawdown will at some point equal the starting balance of the account. At this point the drawdown stops trailing. The trader is then able to decide whether to withdraw profits or continue to increase the account size for later withdrawal. 

When there is a trailing drawdown the trader is forced to continually question their risk and trade management on every trade and this is something that all traders should do if they are to succeed. Yes, our traders have to think more and we think that’s a good thing, and so far, our traders agree.

Downside Trading Risk Management

Having the trailing drawdown is the “cost” of putting our funded traders in the real market. Every time we fund a real trader with real money that money immediately is subject to high loss risk. If the trader trades badly, straight down, then we lose all that money. Each time they trade well however, that risk is diminished by the trailing drawdown until the risk is removed. It’s this risk removal that enables us to fund another new trader.

FTMO will give you free rein, do as you wish. We’ll ask you to consider good trade account risk management. Which of these two approaches do you think is more likely to help a trader have a long term career as a prop trader? 

Minor Differences between FTMO and Funded Trading Plus

There are other differences between the two firms, but most of these are minor and will only be important to some traders.

Who you deal with

FTMO had nearly 1 million accounts last year. As a trader you can only ever be a number to them. You’ll maybe get to communicate with a customer service representative who can deal with a set number of standard issues. Good luck if you actually want to speak to someone.

At Funded Trading Plus the directors are hands on. You can speak to us directly and we have spoken personally with every one of our funded traders. We’ll listen to your suggestions and we’ll try to help you become profitable.

Other Rules

Difficult for me to comment to directly of FTMO’s rules. Certainly they have many more than we do. These rules are not that easy to initially ascertain from the website and without purchasing an account we can’t be sure what other rules their accounts have. Forums and Trust Pilot have a number of complaints about rules and how the traders were unaware of them. For example different market symbols may have different news announcements you are not allowed to trade over. We’d like to see better clarity on FTMO rules.

Time Limits

FTMO have both maximum and minimum trading days for their accounts. They may call their fee a one-off but if you have to restart every 30 days, then that’s not exactly a one-off fee.

Minimum trading days don’t work from a prop firm or trader perspective, if you make the profit target in 1 day, waiting 10 days and taking 9 meaningless, spread only trades to get over this rules does seem a bit pointless to us.

Maximum trading days is the one we don’t like the most. Effective, safe and well risk managed traders take their time and wait patiently for set-ups. A maximum number of days forces them to speed up and take higher risk. This inevitably leads to a higher failure rate.

Conclusion

We’d very much like to thank all of the traders who have come over from FTMO to trade with us. We believe that your choice to move will prove to be a great decision – and that is what being a great prop trader is all about. Making great decisions and managing risk.

Further Reading

FTMO Statistics 2021

The Funded Trader Program 2022

Which is the best forex or futures online trading firm?

The Experienced Trader Program