January 2023. I heard about FTMO.
Until then I had been solving the wrong problem. I thought my constraint was capital: a small account means small positions, small positions mean small returns, so the plan was to grind the account up until the numbers were worth the effort. That plan takes years and one bad week undoes it.
Prop firms invert the constraint. You are not trying to grow capital. You are trying to prove you can be trusted with someone else’s.
How the model works#
You pay a fee, trade a simulated account against a fixed set of rules, and if you hold to them you trade a funded account and keep most of the profit.
FTMO’s two-step evaluation, as it stands today:
| Rule | Challenge | Verification |
|---|---|---|
| Profit target | 10% | 5% |
| Max daily loss | 5% | 5% |
| Max total loss | 10% | 10% |
| Minimum trading days | 4 | 4 |
Read that table again and notice what it is measuring. One number is about making money. Three are about not losing it.
The part that reframed everything#
I had been treating risk management as the boring half of trading, the thing you do so you can keep doing the interesting half. The evaluation says the opposite. You can hit the profit target and still fail. You cannot breach the drawdown and pass on the strength of your entries.
The firm is not asking whether you can predict. It is asking whether you are consistent enough to be a known quantity. Those are different skills, and only one of them was what I had been practising since October.
A challenge is a specification. Most people read it as an obstacle between them and the money. It is closer to a definition of the job.
What I got wrong about it#
I thought passing was the hard part.
Passing is a deadline with a target, and a deadline makes you trade. Keeping a funded account has no target and no deadline, which removes the one thing that had been forcing discipline on me. I would learn that later, expensively.