🛑 FTMO Exposed: Hidden Rules You Must Know!
Summary
TLDRThis 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
📈 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.
🚫 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.
🌙 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.
🛑 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.
Mindmap
Keywords
💡FTMO Rules
💡Funded Account
💡News Trading
💡Stop Loss
💡Take Profit
💡Risk Management
💡Economic Calendar
💡Swing Account
💡Overnight Trading
💡Trading Updates
💡Violation
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
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