Does FTMO's Maximum Total Loss include unrealized losses?

Yes, FTMO's Maximum Total Loss includes both realized losses and floating unrealized losses. Your account equity must never drop more than 10% below your initial starting balance. If your equity falls to this level due to open positions, you breach the rule even without closing the trades.

What happens if I breach the Maximum Total Loss?

Breaching the Maximum Total Loss immediately terminates your account. In the challenge phase, you fail and must purchase a new challenge to try again. In the funded phase, your funded account is permanently closed and you lose access to the capital.

Does the Maximum Total Loss reset when I make profits?

No, the Maximum Total Loss threshold never resets or moves. It's always calculated from your original starting balance regardless of profits. On a $50,000 account, your equity can never drop below $45,000, even if you've grown the account to $60,000.

Is Maximum Total Loss calculated from balance or equity?

FTMO's Maximum Total Loss is calculated from account equity, not balance. Equity includes your balance plus or minus any floating profit/loss from open positions. The rule triggers when your total account equity drops 10% below the initial starting balance amount.

Does FTMO's Maximum Total Loss include unrealized losses?

Yes, FTMO's Maximum Total Loss includes both realized losses and floating unrealized losses. Your account equity must never drop more than 10% below your initial starting balance. If your equity falls to this level due to open positions, you breach the rule even without closing the trades.

What happens if I breach the Maximum Total Loss?

Breaching the Maximum Total Loss immediately terminates your account. In the challenge phase, you fail and must purchase a new challenge to try again. In the funded phase, your funded account is permanently closed and you lose access to the capital.

Does the Maximum Total Loss reset when I make profits?

No, the Maximum Total Loss threshold never resets or moves. It's always calculated from your original starting balance regardless of profits. On a $50,000 account, your equity can never drop below $45,000, even if you've grown the account to $60,000.

Is Maximum Total Loss calculated from balance or equity?

FTMO's Maximum Total Loss is calculated from account equity, not balance. Equity includes your balance plus or minus any floating profit/loss from open positions. The rule triggers when your total account equity drops 10% below the initial starting balance amount.

Updated 2026-03-08

FTMO Maximum Total Loss Rule Explained

FTMO

Quick Answer

FTMO's Maximum Total Loss rule is 10% from your initial account balance.

This rule is calculated from your starting balance, not current equity. It includes both realized losses and floating negative positions. Breaching this limit immediately fails your challenge or terminates your funded account.

Key Rule Details

Limit

10%

Dollar Value ($100,000)

$10,000

Basis

initial account balance

Resets

Never (static)

Breach

Account terminated

Calculation Example

Account Size: $100,000 — Maximum Total Loss: $10,000

Account Size	$100,000
Maximum Total Loss Limit	$10,000
Scenario: Closed P&L	$-2,800
Scenario: Floating P&L	$-5,200
Total Exposure	$-8,000
Remaining Buffer	$2,000

Limit used:80%

Common Mistakes

Ignoring Floating Losses

Many traders focus only on closed trades while having large unrealized losses. If you start with $100,000 and have $5,000 in realized losses plus $6,000 in floating red positions, you've breached the 10% limit at $11,000 total drawdown. The rule counts unrealized P&L, not just closed trades.

Confusing Balance vs Equity

Traders mistakenly calculate the 10% from their current balance instead of the original starting balance. On a $50,000 account, the maximum loss is always $5,000 from the initial balance, even if your balance grows to $60,000. The threshold never moves from that original $45,000 equity level.

Weekend Gap Risk

Holding positions over weekends can cause gap openings that instantly breach the rule. If you're already down $8,000 on a $100,000 account and hold positions into Monday, a $3,000 gap against you puts you at $11,000 total loss, exceeding the $10,000 maximum. Weekend gaps don't give you time to react.

Averaging Down Near Limit

Adding to losing positions when close to the 10% threshold accelerates rule violations. If you're down $4,500 on a $50,000 account and double your position size hoping to recover, any further adverse movement quickly pushes you past the $5,000 maximum total loss limit.

Protection Strategies

Set Personal 8% Maximum Loss Buffer

Always stop trading when you reach 8% drawdown instead of the full 10% allowed. This gives you a $2,000 safety cushion on a $100,000 account and $400 buffer on a $25,000 account. The 2% buffer protects against overnight gaps, spread widening, and calculation errors.

Use 1% Risk Per Trade Maximum

Limit each trade risk to 1% of your initial balance to prevent rapid drawdown. On a $50,000 account, this means $500 maximum risk per position. This approach requires 10 consecutive losses to reach your danger zone, giving you statistical protection against normal losing streaks.

Set Equity-Based Account Alerts at 7%

Configure your platform to alert you when account equity drops to 93% of starting balance. For a $100,000 account, set the alert at $93,000 equity. This early warning system gives you time to close positions, reassess your strategy, and avoid approaching the 10% termination threshold.

Avoid Trading Before Major News Events

Skip trading 2 hours before and after high-impact news releases when near 6% drawdown. News events create unpredictable volatility that can gap past your stop losses. If you're already down $6,000 on a $100,000 account, news-driven volatility can easily push you past the $10,000 limit in minutes.

Related Rules

Maximum Daily Loss

→

Profit Target (Phase 1)

10%

→

Profit Target (Phase 2)

FTMO Comparisons

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Frequently Asked Questions

Disclaimer: This guide is for informational purposes only and does not constitute financial advice. Prop firm rules change regularly — always verify current terms on FTMO's official website before purchasing a challenge. Updated 2026-03-08.