5 Steps to FTMO Challenge Success

Welcome to Disciplined FX! My name is Andrew Bloom, and my vision is to provide simple and effective Forex day trading tutorials that help diverse individuals from all walks of life become profitable and responsible traders. I am also an affiliate of FTMO, but this is a decision I made on my own. I firmly believe that FTMO is the most reliable and trustworthy prop trading firm available. This post contains affiliate links.

I want to share with you all a short list of 5 important steps you need to take to strategize your FTMO trading challenge for success.

 Just last week, I passed the verification stage for a $200k account under FTMO, and next I’ll receive instructions for how to proceed as a funded trader. 

I started this challenge on July 29th and passed through verification in a little under one month. 

However, the time and work that went into completing this challenge with success started long before I ever learned about FTMO or prop trading. 

I should emphasize now that this is an opportunity that is meant for traders who already have experience with consistently profiting in Forex markets. 

On that note, let’s dive into what I believe are 5 succinct steps you can take to ensure success for your FTMO challenge. 

Want to know more about what FTMO is? Click this link to learn about their funded account challenge.

Step 1) Make Sure You’re Ready

You need to pass your own litmus test for determining whether you are currently ready to take this challenge. 

Me personally, I’ve been day trading for over two years, and finally started achieving consistent profit in the markets about eight months ago. 

I would say that at a minimum you’ll want to see three months’ worth of consistent profit in your own live account, regardless of whether it’s a small or large one. 

Note that I did not say DEMO account. 

Trading with a demo account is an excellent way to get started learning how to trade without risking a lot of money, demo trading is not the same as making decisions when you have your own money on the line. 

I’ll be completely honest with you all and admit that I never bothered with demo trading. 

It definitely led to a handful of painful learning experiences, but it took losing a lot of money to help develop a strong dislike of making trading mistakes because of how badly I wanted to avoid losing that much money again. 

Nevertheless, if you’re watching this and you’re new to trading, while you will have to face the growing pains of live trading at some point, you might as well minimize the amount of money you’ll lose by learning the basics of trading with a demo account first. 

So once you have some experience, make sure you’re then able to see at least three months’ worth of consistent profit with a live account. 

Furthermore, make sure you have a strategy or set of strategies that you trust. 

I personally only trade with mechanical strategies that use very strict and clear rules for entering and exiting my trades as dictated by a set of indicators and overall market direction, but if you’re grounded in your discretionary trading skills, then that works too. 

The bottom line is that you need to be able to go into this challenge with evidence of your own profitability with a live account, and a strategy or set of strategies that you are familiar with and comfortable trading.

FTMO.com - Funding for successful traders

Step 2) Adapt Your Strategy

You’ll likely need to adapt your strategy or your risk management plan to meet the goals of the challenge. 

You’re going to need to be able to hit a 10% return on your initial FTMO demo account balance and avoid losing more than 5% of your account in a day or 10% of your account overall.

So if you’re used to risking 2% a trade and you take three trades a day, then you’ll want to reconsider risking less of your account so as to avoid losing 5% or more should all three of those trades result in a loss. 

Similarly, if your trading history or backtest of your strategy shows that you only manage to return 9% or less each month with what you’re currently risking, you may need to increase the amount you risk or change your strategy so that you return more while also risking less. 

Before doing the FTMO challenge, I was comfortably returning 6% of my account each month or less. I ended up trashing the strategy that I was using and crafting another mechanical strategy that would hit the 10% profit target without having to risk more than 3% a day. 

I also changed my strategy to trade only once a day, tops, so I could get more out of a day’s trade than if I had traded multiple times in the day. 

Because I only trade mechanical strategies, I know I can trust myself to follow my rules, no matter what the rules are, as long as a backtest proves to me that the strategy is profitable. 

You can make decisions about your strategy and adapt accordingly by running the changes through a backtest first. 

Another risk management tactic to use is to adjust your risk as you get closer to your profit target. Disciplined FX FTMO Funded Trader Challenge

For the first part of my challenge and verification stage, I was risking 2 to 3% each trade, and as I grew the account, I would trade less, by risking only 1-1.5% of the account, or even less than that, depending on how much return I needed to finally hit profit. 

So when I was around 8% in profit, with a 2.5 risk-reward ratio, I risked about a percent of the account, while adding a few extra hundreds of dollars to accommodate for commission and slippages. 

I hope you see by now, that this is very much an analytics game. 

You should be checking your stats and changing your numbers throughout the challenge. 

To summarize, you’ll need to adjust your strategy to meet the challenge parameters, which may look a lot different from when you’re trading to make the most profit possible.

Step 3) Do Your Research and Sign-Up

Once you have evidence that you’re profitable and that your strategy has a high probability of meeting the challenge targets within the limitation of the rules on risk, your next action is to start the signing-up process. 

This is the time to gather as much information about FTMO as possible. 

Start by going over the parameters of the challenge and read through the entire FAQ section.

Furthermore, seeking out other videos about trader’s experiences with FTMO is also useful in getting a feel for what the experience is like, as well as gathering any tips on how to navigate your challenge. 

The sign-up itself is pretty straightforward, you will need to provide your general contact information, as well as select the platform you’d like to use for your challenge. 

I will say now, that I am highly biased towards using cTrader, because its interface is far more intuitive and clean than metatrader. 

If you’re coming over from Oanda or like using Trading View, then you’ll definitely want to choose cTrader. 

If you’d like to see what this platform looks like, I’ve included a link below to a video I made that goes over its best features. 

As you prepare to sign-up for your challenge, you’ll also want to make sure you can comfortably afford the trading deposit. 

Ideally, this is money that isn’t needed for basic necessities, like food, rent, or other living expenses. 

Similar to the axiom “trade only what you can afford to lose, pay for a challenge with money that you won’t feel stressed about never seeing again, just in case your first challenge doesn’t work out. 

To be extra cautious about international online payments, make sure you pay with a debit or credit card that has strong cybersecurity services. 

You may also need to contact your bank or credit card company to let them know that you’ll be making an international purchase that doesn’t need to be flagged as suspicious. 

Doing this beforehand can minimize your wait time until you receive the login information for your challenge. 

Once you submit your form and your payment, within a few days FTMO will get back to you and give you login information for your platform of choice, including your user name and password. 

Step 4) Set Up Your Charts and Your Strategy

Once you receive your account info, be sure to explore the resources available to the client on the dashboard. 

You’ll want to download or access the web platform on your computer. 

I don’t know if this is also true for metatrader, although I suspect that it is – Keep in mind that you don’t need to create an account with cTrader, itself, you only need the login info provided by FTMO. 

Once you’re in the platform, you can begin exploring its resources and start setting up your chart with the indicators and tools you need to trade your strategy. 

Note: Become familiar with the platform BEFORE you start your challenge.

Mentally walk through each step of your strategy, from entry to exit, and note where on the platform you’ll need to type inputs and click buttons to make it happen. 

Once you “start challenge” on the FTMO you begin the countdown to your maximum 30 days. Once you take your first trade, you begin your minimum 10 trading day counter. 

Remember that you have to have a trade on a day for it to count towards your minimum of 10 trading days. 

Step 5) Trade and Follow Your Rules. 

This is when it’s crucial to have already developed your trading discipline. 

Trading discipline is my specialty and if you’d like to learn about more ways to hone your discipline as a trader, check out my book The Seven Habits of Successful Day Traders on Amazon. The Seven Habits of Successful Day Traders Andrew Bloom

Keep in mind that you may feel more stress and nervousness while trading a challenge than you do when trading your own account. 

I thought I’d just show up and do what I always do with my strategy, but the pressure to hit a target and avoid precise loss limits changes the dynamics of your trading experience. 

When you feel stress rising, pull on your own healthy coping mechanisms to see you through. 

This can mean taking breaks from watching the trading screen, reminding yourself of the success that you’ve already achieved up to this point, and giving yourself permission to retake the challenge if it doesn’t work out this time. 

If you don’t already, I highly recommend that all responsible traders take up meditation. 

It’s not only valuable for trusting yourself to stay calm and disciplined during your trades, but this practice can also positively change the way you respond to stress in all aspects of your life. 

If you have evidence that your strategy works, remember that your one job is to show up and stick to the plan. 

If you’re running into problems during your challenge and you’re led to believe that your strategy won’t cut it, then be sure to get to work and do a solid backtest of any changes you want to make to your strategy before trying it out on the charts. 

Weekends can be a good time to reflect and improve on your performance. 

Do not let yourself get creative and make up new strategies when trading live. 

Anything you do in real-time trading should first go through a backtest

Lastly, be sure to take care of yourself during your challenge by making sure to get enough sleep at night, eating nutritious meals, and giving yourself down time to play and relax. 

Prepare as an athlete would for trying out for a pro team, because with this challenge you are setting up to prove yourself as a pro trader. 

So, what do you think? Can you put these five steps into action to take the FTMO challenge? 

I wish you all the best of strength and luck, and I’ll see you out there in the markets!