There are many traders out there that believe they have what it takes and the skill to be a successful trader, except for the fact that they do not have enough capital to trade big time. There are companies out there that offer to fund traders and take percentages out of their monthly gains. Today I will discuss the process of trading for a prop firm like FTMO or if you should altogether avoid it.
FTMO, you may have heard of it, you may have not. FTMO is essentially a prop firm that offers funding for traders to trade on the company's behalf and then keep a fair profit split at the end of every month.
So, how does the FTMO challenge work you may ask? It begins by you selecting how much you would like to be funded, all options at a refundable fee (more on that later), and beginning your challenge. Below is a screenshot of the options available directly from the FTMO website.
As you can see, FTMO offers a wide range of different funding for traders; you can get funded up to $100,000 by the company. Yes, you read that correctly, a real live account with 100,000 US Dollars and not one cent of that money is yours, and as you gradually grow that account, you get to keep a share of the profit.
How much may you ask? 70%! That means if you made 12% in one month on a 100K account, which is $12,000, you get to keep $8,400! You can choose to either withdraw it or use it to compound your account, making you more money in the long-run. Sounds great right?
As you see, there is a "challenge" you must complete; it is solely an evaluating process for FTMO to test if you have what it takes to be a successful long-term trader. Let's look at what they evaluate.
The FTMO Challenge begins with aiming for a +10% profit over a period of 30 days with a minimum of at least ten days to achieve this target profit. This is because FTMO knows trading is a long-term game and does not look out for short-term success.
You must also stay below the max -10% loss throughout the whole process with a maximum of -5% in one day. What this means is, if at the end of the challenge you've reached -10% loss, you've failed, or if in one day you lost over 5%, you've also failed.
That's about it, not too complicated, and the best part, if you successfully pass this challenge, you are refunded the amount you've paid to start the challenge, and then you continue to the verification stage.
During the verification stage, it is essentially the same thing except you have double the amount of time to reach your target profit, which is also halved.
To sum up, you have 30 days to achieve +10% during the challenge; once successful; you move on to the verification stage where you have 60 days to achieve +5%.
Whether you're an FTMO trader or not, you are able to contact a representative at FTMO at any time and ask any queries you may have. Alternatively, you can also email them or even phone up their office between the office hours.
If you are based in Prague, there's an office address available which is welcome for traders to set up an appointment and meet a representative in person. What great transparency from a prop firm!
They offer many tools to help you with your trading, they want you to succeed! The full list and explanations of each tool is available here however let's quickly list them all:
In summary, if you know that you have been consistently making a good profit per month, with minimal drawdown, and you're looking for the opportunity to trade for a reputable company to not only fund you and trade for them, FTMO is the company for you.
They have an excellent reputation in the industry, all the way from sticking to their word and paying out their clients, all the way to excellent customer service and functionality.
From my experience, I can easily say this isn't some miracle get rich quick scheme though; the challenge isn't as easy as it initially sounds. We all know trading is hard, and anyone who tells you otherwise is just trying to fool you.
If you are a serious trader, then definitely give it a shot! If not simply sign up and give the free trials a go and start working towards your $100,000 account.