🛑 FTMO Exposed: Hidden Rules You Must Know!

Summary

This video serves as a guide to avoid common pitfalls in the FTMO trading challenge. It emphasizes the importance of adhering to FTMO's rules, especially after funding an account, as violations can lead to account termination. The video illustrates the risks of trading around news events and holding positions overnight, highlighting the differences in rules between the evaluation period and funded account stages. It provides tips on using an economic calendar and setting reminders to avoid rule violations, ensuring traders are well-prepared for the challenges ahead.

Takeaways

• 📈 The video discusses common pitfalls in the 'FTMO Challenge', particularly the differences between the rules during the evaluation period and when trading with a fully funded account.
• 🚫 It's crucial to be aware of the restrictions on trading around news events after the funded account stage; violating these can lead to account termination.
• 📊 Trading during the evaluation period (stage one and two) allows for more flexibility, but fully funded accounts have strict rules about trading during news events that can cause significant price movements.
• ⏰ Traders should regularly check the economic calendar and set reminders to avoid trading during restricted times, especially before important news releases.
• 📉 The importance of having stop-loss orders in place to prevent significant drawdowns from a single trade is emphasized, as is the risk of not adhering to trading rules around news events.
• 💡 The video provides a strategy example, illustrating how to trade based on Fibonacci levels and time frame analysis, while also highlighting the risks of not considering news events.
• 📝 It's advised to review the FTMO FAQ and trading rules thoroughly to understand the restrictions, especially the specific rules about trading during news and holding positions overnight.
• 🌐 The video mentions that different asset classes, such as Forex, indices, and cryptocurrencies, have different trading rules and restrictions, which must be understood to avoid rule violations.
• 🔒 Holding positions over weekends or during unexpected market closures can result in account termination if not managed according to FTMO's specific guidelines.
• 📋 The necessity of checking for special announcements or trading updates that might affect trading rules is highlighted, as these can change the typical trading allowances.
• 🛑 The video concludes with a reminder to be vigilant about the rules, especially after passing the initial stages of the FTMO Challenge, as the funded account stage presents a different set of challenges and potential pitfalls.

Q & A

What is the main focus of the video?

The video focuses on helping viewers avoid common pitfalls and rules violations when trading on a fully funded account, especially during the transition from the evaluation period to actual funded trading.

Why is it important to be cautious after passing stages one and two of the trading challenge?

After passing stages one and two, the rules change, and traders need to be aware of these changes to avoid costly mistakes that could lead to the termination of their trading account.

What is a common trap that traders can fall into when trading with a fully funded account?

A common trap is trading around news events without realizing that the rules for trading during news events are different once a trader has a fully funded account.

What is the significance of the 38.2 FIB level mentioned in the script?

The 38.2 FIB level is a Fibonacci retracement level that traders use to identify potential support or resistance levels in the market, which can be used for entry or exit points in trades.

Why should traders be cautious about economic news events when they have a funded account?

Economic news events can cause sudden and significant market movements that may affect open trades. Trading during these events is restricted for funded accounts to prevent large losses.

What is the recommended action for traders who find themselves with an open position during a news event?

The best action is to remove stop loss and take profit orders to prevent automatic trades during the volatile period, hoping that the market doesn't move against the position significantly.

What are the restrictions on trading during news events for a funded account?

For a funded account, no new trades can be executed or existing trades closed within a two-minute window before and after the news release. This includes opening or closing pending orders, stop losses, take profits, or market executions.

What is the difference between a regular funded account and a swing account in terms of trading during news events?

A swing account allows for more flexibility, including trading during news events and holding trades over the weekend, which is not permitted in a regular funded account.

Why is it crucial to check the economic calendar and set reminders for news events?

Checking the calendar and setting reminders helps traders avoid trading during restricted news events, thus preventing potential rule violations and account termination.

What should traders do if they want to hold positions overnight or over the weekend?

Traders should ensure they are using a swing account or check the trading rules and updates to avoid violating overnight holding restrictions, which can differ based on market and asset type.

What is the recommended strategy for traders to avoid rule violations and protect their trading accounts?

Traders should review the rules thoroughly, stay updated with trading updates, use the economic calendar to set reminders for news events, and consider requesting a swing account if they wish to hold trades over certain periods.

Outlines

00:00

📈 Navigating FTMO's Advanced Trading Rules

This paragraph discusses the complexities and potential pitfalls of trading on a funded account with FTMO. It emphasizes the importance of understanding the rules that apply after passing the initial stages of the trading challenge, where the trader transitions from a simulated environment to a real account. The video warns about the common mistake of trading around news events, which can lead to substantial profits or losses, and the necessity of adjusting strategies to comply with FTMO's rules during this phase. The speaker provides an example of a trade that resulted in a profit but could have led to a disastrous outcome due to a lack of adherence to trading rules, highlighting the need for caution and awareness of the platform's regulations.

05:01

🚫 Trading Restrictions During News Events

The second paragraph delves into the specific restrictions imposed by FTMO on trading during news events for funded accounts. It clarifies that while traders in the verification stage may trade without restrictions, those with funded accounts must avoid trading during a two-minute window before and after significant news releases. The paragraph explains the severe consequences of violating these rules, including the termination of the account. It also provides guidance on how to avoid such violations, such as by setting reminders and adjusting the trading calendar to accommodate news events, and offers a detailed explanation of the types of trades and actions that are prohibited during these periods.

10:02

🌙 Overholding Trades and the Risk of Violations

This paragraph addresses the rules regarding holding trades overnight and the potential for rule violations if trades are not closed before the market closes for extended periods. It explains the difference in rules for Forex pairs, indices, and other assets, and the importance of closing trades before the end of the trading day, especially on Fridays, to avoid penalties. The speaker also introduces the concept of swing accounts, which allow for more flexibility in holding trades over weekends, and provides a strategy for checking trading updates to avoid unexpected rule violations due to special market conditions or maintenance periods.

15:03

🛑 Final Thoughts on FTMO Trading Rules and Safety Measures

The final paragraph summarizes the key points discussed in the video, emphasizing the importance of understanding and adhering to FTMO's trading rules to avoid account termination. It reiterates the differences in rules between the challenge stages and the funded account stage, and the need for traders to be vigilant, especially when transitioning to a funded account. The speaker advises traders to review the rules regularly, check the economic calendar, and stay informed about special announcements to ensure compliance and success in trading. The paragraph concludes with a call to action for viewers to watch additional educational videos on trading strategies and risk management.

Keywords

💡FTMO Rules

FTMO Rules refer to the guidelines and regulations set by the Forex Trading Market Online platform for its traders, particularly in the context of the video, during the funded account phase. These rules are crucial as they can lead to the termination of a trader's account if violated. The video emphasizes the importance of adhering to these rules to avoid significant financial losses.

💡Funded Account

A Funded Account in the context of the video signifies the stage where a trader has successfully passed the initial evaluation phases and has a real money account with significant capital. The video highlights the increased responsibility and risk management required when trading with a funded account, as opposed to the initial evaluation period.

💡News Trading

News Trading involves making trading decisions based on economic news releases that can significantly impact market volatility. The video warns about the risks of trading around news events, especially during a funded account phase, where certain trades can lead to account termination if executed within specific time frames around news releases.

💡Stop Loss

A Stop Loss is an order placed by a trader to limit their potential loss on a trade. The video script discusses the importance of setting a stop loss to protect against significant drawdowns, especially in the context of volatile news events, and the consequences of not having one in place.

💡Take Profit

Take Profit is an order set by a trader to secure profits when a trade reaches a certain favorable price level. The video uses the term to illustrate a successful trade outcome where the set profit target is reached, emphasizing the importance of risk-reward management in trading.

💡Risk Management

Risk Management is the process of identifying, evaluating, and controlling risk in trading. The video script underscores the importance of risk management, especially when transitioning from an evaluation phase to a funded account, where the stakes are higher and the potential for loss is greater.

💡Economic Calendar

An Economic Calendar is a tool used by traders to track upcoming economic news events that can affect financial markets. The video suggests using an economic calendar to set reminders and avoid trading during news events to prevent violations of FTMO's rules.

💡Swing Account

A Swing Account is a type of trading account that allows for holding positions over a longer period, typically overnight or through weekends. The video mentions that swing accounts have different rules regarding news trading and overnight positions, offering an alternative for traders who wish to avoid the restrictions of standard accounts.

💡Overnight Trading

Overnight Trading refers to holding positions open through the night, which is typically not allowed for standard accounts due to market gaps and increased risk. The video explains the restrictions on overnight trading and the exceptions for swing accounts, emphasizing the need to close positions before the market closes for more than two hours.

💡Trading Updates

Trading Updates are announcements or notifications from a trading platform that may include changes in trading rules, market conditions, or special events. The video uses the term to illustrate a scenario where a trader could unknowingly violate rules due to a lack of awareness of such updates, leading to account termination.

💡Violation

A Violation in the context of the video refers to breaking the trading rules set by FTMO, which can result in the termination of a trader's account. The video script provides examples of how seemingly profitable trades can turn into violations if executed during restricted news events or if positions are held through certain market closures.

Highlights

Avoiding often ignored FTMO rules that can cost your entire account.

The importance of understanding the difference in rules between evaluation and funded account stages.

The potential for a false sense of security after passing the initial trading stages.

The risk of trading around news events and the impact on the Euro USD.

Using technical analysis to identify entry and exit points for trades.

The importance of adjusting stop losses in anticipation of economic news events.

The consequences of not adhering to FTMO's rules regarding trading during news events.

How a single trade violating FTMO's rules can result in account termination.

The difference in trading rules after passing the evaluation process compared to the funded account.

The restrictions on trading during news releases for funded accounts.

The allowance to hold trades through news events but restrictions on executing new trades.

The exception to news trading restrictions for swing accounts.

The necessity to close trades before the market closes for more than two hours.

The specific rules for holding trades overnight and the exceptions for swing accounts.

The impact of trading updates and special announcements on trading rules and account safety.

The importance of reviewing rules and setting notifications to avoid rule violations.

The potential pitfalls of holding positions open during weekends and special events.

Recommendations for traders to stay safe and avoid common mistakes with FTMO.

The need for traders to be aware of and adapt to changing rules throughout the trading process.

Transcripts

in this video I'm going to help you

avoid too little known and often ignored

ftmo rules that will cost you your

entire account of violated

passing stages one and two is hard

enough but the actual funded account is

where the rubber really meets the road

it's easy to have a false sense of

security After all you've been trading

on ftml for a couple months and you

think you know how everything works but

like everything in life there's usually

a catch this is definitely true with

ftml

what you might not realize is rules

change between the evaluation period And

when you're trading your fully funded

account one of the biggest traps you can

easily fall into is related to trading

around news events strong uptrend for

Euro USD up 1500 Pips since the end of

last year this could be a spot where I

move to a lower time frame and look to

go long on the four hour test of the

38.2 FIB level three times before moving

higher

dropping down to the 15 minute it

recently pushed off the 50 percent

looking at the recent history price

dipped below the 61a but came right back

up the very next candle three bullish

candles in a row showing strength

and may set a buy stop here stop loss

below the recent low and take profit at

the 127 extension like I talked about

some of my other videos

at this point we would be triggered in

looking make 2.4 to 1. keep in mind we

took this trade towards the end of the

day on Tuesday April 11th have a peek at

the calendar notice there are several

economic news events coming up tomorrow

that might affect the markets we're in

stage two of The Challenge and we may

want to tighten our stop loss as the

time gets closer just to be safe

here we get a couple red candles that

are slightly larger than normal maybe we

decide to cut our risk in half move our

stop loss up

stop loss was never hit but we did hit

our full take profit this is a 15 minute

chart but even jumping down to the two

minute we see this move was sudden in

this case we did make money but it could

have just as easily gone the other way

if we were wrong and didn't have a stop

loss in place we could have easily been

in five percent drawdown just from this

one trade and lost to the entire

challenge now fast forward a month later

we've passed stages one and two and now

have our 100K funded account looks like

price is in a range and we're towards

the bottom end of the Zone we want to

move to a lower time frame and look for

another long position

we set a buy stop that'll get triggered

when price moves up towards the take

profit

price moves a little lower still not in

the trade

and just like that price was triggered

and hit our take profit all in the same

five minute candle this was for a 2.6 to

1 risking one percent of our account so

our 100K account has now jumped to a

hundred and two thousand six hundred

dollars we're already think about how

much money we're gonna make this month

the only problem is this big spike was

caused by news that we've forgot to

check you think you've just made twenty

six hundred dollars but you'll soon get

an email from ftmo notifying you about

the rule violation there's no warning or

three strikes and you're out your

account that you've worked so hard for

terminated after spending two months

carefully passing both stages one

mistake costs you everything

let's take a closer look at their FAQ

see what happened here on the home page

and you want to scroll to the FAQ and

then down to can I trade news you're in

a rush and you see the first line

without any restrictions reading the

entire line it says in the ftmo

challenge and verification you can trade

during news without any restrictions

if you've seen other videos about ftmo

or prop firms the challenge is often

referred to as stage one and

verification is the Second Step so if

you recall the first trade I showed we

added this full amount of profit to our

balance because we were still in the

verification stage however this 2.6 to 1

trade happened during our funded account

and those rules are completely different

scrolling down we're told that after

passing the evaluation process you

should be careful when trading during

news we've seen the massive spikes that

news can cause so it makes sense we

should be careful most people would

think they already know about the news

and stop reading

[Music]

it goes on to say the ftmo account which

is the funded account is not allowed to

execute any new trade or close an

existing trade on the targeted

instrument in the window two minutes

before until two minutes after the

release and this includes everything

from opening to closing a pending order

a stop loss A take profit or a market

execution you are allowed to hold

through the news you just have to hope

your pending take profit or stop loss

order isn't hit and let's not kid

ourselves may be taken as a violation is

a nice way of saying your account will

definitely be closed not everything is

off limits during the news release for

example during the non-farm payroll you

want to stay away from USD JP wire GBP

US dollar but you're free to trade Euro

GBP or AUD nzd scrolling down on the

right we see the news events and on the

left what you want to avoid right before

and right after the only exception to

this rule is if you specifically request

a swing account when you pass stages one

and two to keep from being surprised

here's what I would recommend

every weekend go to the home page

trading economic calendar

off to the right here you'll see an icon

that says add to calendar I suggest

setting a reminder 15 minutes before

give yourself enough time to close your

trades

scrolling up I would uncheck no

restrictions low and medium priority add

every red row to your calendar at the

beginning of the week one of The

Accidental reasons people lose their

funded account is executing trades

during news we'll get into the second

reason in a second but here's a pop quiz

to make sure you understand here we have

a level that's provided a reasonable

amount of support in the past

scooting ahead in time we see a Hint it

may be finding support again

I have the next news event highlighted

which is about three hours away we

decide to take a quick scalp anyways

so here stop loss was definitely hit

during the news pause the video and

think about what would happen in each of

these situations

number one two and four you only lose

the trade number three is where you'd

lose your entire account we're in a nice

short trade since yesterday

it just so happens that our profit

Target was hit during the news what

happens in all four of these cases

in all four of these cases we would

enjoy the full profit we're only

restricted red news events we're in a

long trade with the restricted red news

event coming up we forgot to exit our

trade

what would happen here

well you got lucky nothing would happen

for any of the four the trade is still

open you only get yourself in trouble

when you enter or exit during a red

event

currently we're in a long position

and get stopped out during a red news

event what happens in these four cases

nothing would happen in any of these

cases certainly the news can affect

other currencies but as far as the rules

only Euro pairs like Euro USD Euro GBP

would have been restricted

you were long on the S P 500 and hit our

take profit during a red U.S news event

what happens here

option one two and four you get credit

for your full profit option three is a

violation you lose your full account U.S

indexes are also affected during U.S

news events to recap the first point the

rules for stage one and two when you're

trying to pass the challenge are totally

different than when you have a funded

account during the evaluation it's still

risky having a position open during the

news a sudden Spike can put you at a

five percent drawdown but otherwise

you'll live with the profit or loss from

that trade

but for your normal funded or aggressive

account any kind of trade during a

restricted red news event is a violation

will cause you to lose your account it

doesn't matter if you were right in your

pending profit Target was hit or if your

stop loss was triggered any traded all

during the window is game over

if you find yourself in a situation

where you do have an open position

during a related news event the best

thing you can do for the next five

minutes is to remove your stop loss and

take profit to hope nothing major

happens

however if you set your notifications on

the calendar like I showed you'll be out

of Harm's Way 15 minutes before the news

only other way to be safe with a funded

account during news if you want to

reduce your leverage a hundred to one

down to 30 to 1 you can request a swing

account from ftmo

the news is the first trap but there's

another one we'll talk about now going

back to ftmo's page another question

asked is do I need to close my positions

overnight by now we should be used to

this kind of language during stages one

and two the trader can basically do

whatever he wants

most people will stop reading here but

given how the news was handled we should

be able to guess what's coming next in

cases where the market is closed for

more than two hours the trade must be

closed before the end of the trading day

once again the swing accounts are the

exception to the rule not only is there

no restriction on news but you can hold

your trades over the weekend scrolling

up there's two links we want to pay

attention to all Forex pairs are going

to be on the same schedule Monday

morning to Friday night the market is

closed for 10 minutes a day trading is

closed on Saturdays and Sundays let's

say it's almost midnight on Wednesday

and you have a trade open on AUD JPY the

market is going to close for 10 minutes

will you be in violation if you don't

close your trade no it's only when the

market is closed for two or more hours

now it's Friday and you still have the

position open

almost Saturday what needs to happen now

no matter if you're up or down you must

close the trade before the market closes

or you'll be in violation with ftmo and

they'll take away your entire account

the hours for gold are a little

different than Forex market closes for

an hour and 15 minutes every day during

the week as well as the entire weekend

once again you can leave your trade open

between these breaks because they're

less than two hours a piece just make

sure you exit before the weekend

any of the indices will have the same

hours as the medals we just saw same

rules still apply you can trade

overnight because the Gap is only 75

minutes but just make sure to close out

before the weekend

dollar Index we have a three hour gap

every day so no holding overnight at all

unless you're on a swing account

you can also trade certain equities in a

cfd format the price of Apple is the

same for what it trades for the NASDAQ

and it could be a good option for day

Traders

just make sure to close out by the

closing bell

as you know the crypto Market is open 24

7 and you can trade them on Saturday and

Sundays with ftmo if you think you know

everything about holding trades

overnight there's one more little known

fact that can easily Blindside and take

you out

a few minutes ago I showed you the

overnight FAQ and mentioned there's two

links the first is the symbol site which

we just looked at but we also need to

focus on the second which is the trading

updates

as I'm recording this it's Friday May

19th if I were to hold a Bitcoin

position until Sunday

even though the market is 24 hours I'd

soon get an email from ftmo saying I

violated yet another rule let's go back

to their site I'll show you what I mean

we're back on the overnight screen this

time we're going to click on the trading

updates link

tomorrow ftml is maintenance scheduled

for five hours this is more than the two

hour window so if I let my Bitcoin trade

run through the weekend I'll be in

violation and ftmo will close the

account

it doesn't matter that technically the

market never actually closed from ftmo's

perspective it did and unless you have a

swing account all trades of every kind

must be closed by 1 pm server time

we have Buddha's birthday in a week

normally you can trade the 8K 50 on

Fridays but this would be an exception

if your trade carries over from Thursday

to Friday you would have broken the rule

and lost your account are we allowed to

trade news or hold over the weekend like

many things in life it depends if you're

in stage one or two most of the rules

don't apply to you but don't get too

comfortable passing the challenge is a

step in the right direction but you're

still out of pocket the application fee

you haven't gotten your refund or

received any profit yet

not to mention Now's the Time to pay

extra attention and dance around a

Minefield of rules all designed snatch

your account

review the rules and quizzes at the

beginning of this video until you know

them like the back of your hand make

sure to stay safe and check the upcoming

calendar and special announcements going

from here check out my video on five

steps to pass any prop challenge then

check out my Essential playlist where I

go over psychology risk management

setting stop losses and take profit

comment down below any experience you've

had with ftmo or another prop firm good

luck talk to you soon