Funded Account / Prop Firm

### You are buying an exam, not capital Read the small print at the firm you are considering. FTMO's own trading objectives page states that the accounts it provides are "demo accounts with fictitious funds" and that trading takes place in a simulated environment only. That is not a gotcha, it is the model. Your payout is a contractual reward for hitting objectives inside a simulation, not a share of a real brokerage P&L. It also means the money you send in is an evaluation fee paid to a private company. It is not client money at a regulated broker, it is not segregated, and no FSCS or ICF scheme stands behind it. ### The rules are the product, and they vary a lot The 10% target, 5% daily, 10% total shape is FTMO's two-step challenge: a 10% profit target in phase one, 5% in phase two verification, a 5% max daily loss recalculated at 00:00 CE(S)T from the previous day's closing balance, a 10% max overall loss, and at least four trading days in each phase. Their one-step version is a different animal, with a tighter 3% max daily loss and a 10% overall loss that trails your balance upward as you profit. Futures firms run on dollars instead of percentages, and it is worth separating the two limits Topstep runs. The Maximum Loss Limit is the one that ends the account: $2,000 on a $50K Trading Combine, $3,000 on $100K, $4,500 on $150K. Per Topstep's help centre it rises with your end-of-day balance, never moves back down, and locks permanently once it reaches your starting balance. The Daily Loss Limit is a separate thing ($1,000, $2,000 and $3,000 on those same account sizes), and note that in the Trading Combine it is optional, while on a Live Funded Account it is automatic. Hitting it is not a violation, it just ends your day: the platform flattens your positions, cancels your orders, and locks you out until the next session opens at 5pm CT. ### What actually knocks people out Attention goes to the profit target. The constraints that end accounts are the loss rules, for three reasons. - **Floating losses count.** Topstep measures against net P&L including open positions, so a trade you fully intend to hold through a retracement can breach a limit while it is still open and, on your chart, still perfectly fine. - **Trailing drawdown tightens as you win.** An end-of-day trailing limit ratchets up behind you, so the room you had on day one is gone by day ten. Firms that trail *intraday* off your highest unrealised profit are harsher again: a momentary dip can close the account. - **Consistency rules.** Topstep asks that your best single day stay below 50% of your profit target, and going past it raises your consistency target rather than failing you, which is what then stands between you and a payout. FTMO applies a best day rule to both its one-step and two-step challenges, capping the most profitable day at 50% of the total profit made on winning days. One heroic session can leave an otherwise profitable account stuck. Run the arithmetic before you pay for anything. Against a 5% daily cap, five full-risk losses at 1% each is your entire day gone, and they can all land inside one session. The evaluation fee is buying you a set of constraints, so price the constraints, not the headline account size. ### The sector's legal footing is still unsettled The CFTC sued Traders Global Group, parent of My Forex Funds, in 2023. On 13 May 2025 a federal judge dismissed the case with prejudice and sanctioned the CFTC over its conduct in the litigation. Read that carefully: it was a ruling about the regulator's behaviour, not a ruling that the funded-account model is lawful or that any particular firm is sound. Firms in this space have appeared, rewritten their rules mid-programme, and shut down. Treat the fee as money you can lose, because contractually it is.