FTMO Position Sizing — Risk Per Trade Rules for Prop Firm Traders

Prop firm challenges have strict drawdown rules. Blow past the daily loss limit or max drawdown and you fail — no second chances. Position sizing is not optional in prop trading. It is the difference between passing the challenge and losing your evaluation fee.

Prop Firm Drawdown Rules

Prop Firm	Max Daily Loss	Max Overall Drawdown	Account Sizes
FTMO	5%	10%	$10K-$200K
FundedNext	5%	10%	$6K-$200K
The 5%ers	5%	10%	$6K-$4M
Alpha Capital	5%	10%	$10K-$200K
BrightFunded	5%	8%	$10K-$200K

The daily loss limit is the silent killer. Most traders focus on the max drawdown (10%) but get caught by the daily limit (5%). Three bad trades at 2% risk each on the same day = 6% daily loss = challenge failed.

Recommended Risk Per Trade by Account Size

FTMO Account	0.5% Risk	1% Risk	Max Trades Before Daily Limit
$10,000	$50	$100	5-10 trades
$25,000	$125	$250	5-10 trades
$50,000	$250	$500	5-10 trades
$100,000	$500	$1,000	5-10 trades
$200,000	$1,000	$2,000	5-10 trades

At 0.5% risk per trade, you can lose 10 trades in a day before hitting the 5% daily limit. At 1% risk, you can lose 5 trades. Professional prop traders almost always use 0.5% — it gives more room for error.

Lot Sizing for FTMO Forex Accounts

For a $100,000 FTMO account risking 0.5% ($500):

Stop Loss (Pips)	Lot Size (EUR/USD)	Pip Value	Dollar Risk
15 pips	3.33 lots	$33.30/pip	$500
20 pips	2.50 lots	$25.00/pip	$500
30 pips	1.67 lots	$16.70/pip	$500
50 pips	1.00 lots	$10.00/pip	$500
75 pips	0.67 lots	$6.70/pip	$500
100 pips	0.50 lots	$5.00/pip	$500

The Daily Loss Trap

Here is how most prop firm traders fail. Not from one big loss — from cascading small losses compounded by emotional decisions:

1. Trade 1: -1% loss. Normal, acceptable.
2. Trade 2: -1% loss. Two in a row. Frustration builds.
3. Trade 3: Increases size to "make it back." -2% loss. Now at -4% for the day.
4. Trade 4: One more trade to "get back to even." -1.5% loss. Total: -5.5%. Daily limit breached. Challenge over.

If that trader kept 0.5% risk and stopped after 3 losses (daily loss cap of 1.5%), they would still be in the challenge with 98.5% of their balance intact.

Prop Firm Position Sizing Rules

• Use 0.5% risk per trade, not 1%: The daily loss limit makes 1% risky on bad days
• Set a personal daily loss cap: Stop trading after 2-3% daily loss, not the firm's 5% limit. Give yourself a buffer
• Never increase size after a loss: This is revenge trading. It is the number one reason traders fail prop firm challenges
• Calculate lot size BEFORE entering the trade: Not after, not "roughly." Use a calculator, type in the numbers, trade the exact output
• Account for spread and slippage: Your actual stop loss is entry minus stop level PLUS spread. On volatile pairs, add 2-5 pips to your stop distance calculation

Calculate Your Prop Firm Position Size

• Position Size Calculator — works for any prop firm account size
• Risk/Reward Calculator — evaluate setups before entering
• Stock Profit Calculator — calculate P&L scenarios