FTMO offers 1-Step Challenge (90% split from day 1) and 2-Step Challenge (Phase 1 + Verification, 80% base scaling to 90%) across $10K-$200K sizes. The 1-Step has no Swing variant. Full pricing and account-type breakdown in my FTMO accounts guide, or read the complete review. Sign up at FTMO.
The FTMO 2-Step Challenge is built on two sequential phases. Phase 1, called the FTMO Challenge, requires a 10% profit target. Phase 2, called Verification, requires 5%. Both phases apply the same loss rules: a 5% daily loss limit and a 10% static max loss. Minimum trading days reset between phases, meaning you need at least 4 days in each. Pass both and you receive an FTMO Account.
This structure is not arbitrary. The two-phase design is how FTMO has operated since 2014, and the halved target in Verification serves a specific purpose: filtering for consistency rather than rewarding a single good run.
What's the difference between Challenge and Verification at FTMO?
The Challenge is Phase 1. The Verification is Phase 2. Together they form the classic FTMO 2-Step evaluation path.
The core mechanical difference is the profit target. Phase 1 asks for 10% of initial balance. Phase 2 asks for 5%. Everything else (the daily loss limit, the static max loss, the minimum trading days, the account size) stays identical.
Here is what that looks like side by side across both phases plus the 1-Step for comparison:
| Rule | Phase 1 (Challenge) | Phase 2 (Verification) | 1-Step Challenge |
|---|---|---|---|
| Profit target | 10% of initial balance | 5% of initial balance | 10% of initial balance |
| Daily loss limit | 5% of initial balance | 5% of initial balance | 3% of initial balance |
| Max loss type | 10% static | 10% static | 10% trailing (end-of-day) |
| Minimum trading days | 4 days | 4 days | 4 days |
| Phases to funding | 1 of 2 | 2 of 2 (final) | 1 of 1 |
| Profit split at funding | — | 80% base, 90% scaled | 90% from day 1 |
| Best Day Rule | No | No | Yes |
On a $100K account: Phase 1 requires $10,000 net profit. Phase 2 requires $5,000 net profit. Both must be achieved while keeping daily drawdown above $95,000 (5% DLL floor) and overall equity above $90,000 (10% static max loss floor).
The FTMO accounts overview article covers the full range of account sizes and challenge types. For the deeper mechanics on each individual rule, see FTMO rules overview.
How does Phase 1 (Challenge) work?
Phase 1 is the FTMO Challenge. It is the first gate between you and a funded account.
Your task is to grow the account by 10% of the initial balance while keeping drawdown under both thresholds at all times. On a $25K account that means reaching $27,500 (net profit $2,500) before either the daily balance drops more than $1,250 in a single day or the overall equity drops below $22,500.
The 4-day minimum exists so FTMO can see at least a small sample of trading behavior. You cannot pass Phase 1 in a single day, even if you hit the profit target on day one. Four separate calendar days must have at least one open position.
As of May 2026, FTMO does not publish a strict calendar deadline for the 2-Step path. The Phase 1 evaluation is typically referenced as a 30-day window in community discussions, but traders who need more time can continue beyond that if they have not breached a loss rule. The critical constraint is loss-rule compliance, not a countdown timer.
Traders on the 2-Step path do not face the Best Day Rule that applies to the 1-Step Challenge. There is no cap on how much profit can come from a single trading day. FTMO's Best Day Rule is specific to the 1-Step product.
The FTMO daily loss limit article breaks down exactly how the 5% floor is calculated and when it resets. The FTMO max loss rule covers the difference between static and trailing max loss across products.
How does Phase 2 (Verification) work?
Verification is Phase 2. It begins immediately after you pass Phase 1. The account transitions without a waiting period.
The profit target drops to 5% of initial balance. All other rules carry forward unchanged: 5% daily loss limit, 10% static max loss, 4-day minimum trading days. The account size and loss floors are reset to the original initial balance figures, not to wherever you ended Phase 1.
On a $100K account: you start Verification with an initial balance reference point of $100,000. The 10% max loss floor is $90,000. The 5% DLL floor remains $95,000 per day. Your target is $5,000 in net profit.
A typical community reference for Verification is a 60-day window, roughly double Phase 1. Whether a formal calendar cutoff applies in 2026 is not explicitly published on FTMO's trading objectives page. The core expiry mechanism is always loss-rule breach, not time.
Because the target is lower and the timeframe is longer, Phase 2 is mechanically easier than Phase 1. That is intentional. FTMO is not trying to make you work harder in Verification. It is checking whether you trade the same way when you know you have already succeeded once.
The FTMO minimum trading days article details exactly what counts as a valid trading day and why the 4-day requirement exists per phase rather than across the entire evaluation.
Why is Phase 2 target halved?
The 5% target is not a gift. It is a filter.
A trader who got lucky in Phase 1 (perhaps one massive winning day that put them over 10%) faces a harder time replicating that in Phase 2 in a controlled, consistent way. A trader who built to 10% steadily across multiple sessions and multiple trading days will find 5% comfortable.
This is FTMO's consistency signal. FTMO has paid out over $500M to traders since founding and has processed 2.3 million accounts in 2024 alone. The two-phase structure is part of why their funded pool behaves differently from firms that run a single evaluation. By requiring a second phase at a lower target, FTMO rewards traders who trade repeatably, not just traders who can capitalize on a single market condition.
There is also a practical math component. If Phase 1 requires 10% and Phase 2 requires 5%, a trader who failed Phase 1 repeatedly and finally passed on an outlier run is unlikely to replicate even half that performance under the same loss rules. The halved target is calibrated to be achievable by consistent traders and difficult for outlier traders.
The FTMO 2-Step Challenge article covers the full evaluation structure including pricing and what you receive at each stage.
Can you fail Verification after passing Phase 1?
Yes, and this happens more often than traders expect.
Passing Phase 1 does not suspend the rules. The 5% daily loss limit and 10% static max loss apply throughout Verification exactly as they did in Phase 1. A single bad day that breaches the daily loss limit ends the Verification, and the evaluation fails.
Common failure patterns in Verification:
- Overconfidence after Phase 1 success: taking larger position sizes because the target feels easy at 5%
- Giving back profits quickly and approaching the max loss floor before reaching the target
- News trading on a Standard account, forgetting that the restriction only activates on the live FTMO Account. It is fine during Verification, but traders sometimes get confused about when it actually kicks in
The FTMO news trading rule and FTMO prohibited strategies articles clarify which restrictions apply during evaluation vs funded stage. The FTMO weekend holding rule covers Standard vs Swing position holding differences.
One rule to be especially aware of: the 10% max loss is static. It is calculated against the initial account balance, not the current equity. If your Phase 1 pass left you with a $108,000 balance on a $100K account, Verification still treats $90,000 as the max-loss floor. Building up the account in Phase 1 does not push the floor higher the way a trailing stop would.
Does the 4-day minimum reset between phases?
Yes. The 4-day minimum trading day requirement is per phase, not shared across the entire evaluation.
Phase 1 requires 4 trading days. Phase 2 requires 4 trading days. The minimum total is 8 trading days before you can receive an FTMO Account. Days from Phase 1 do not carry over.
A trading day counts when you have at least one open position during market hours on that calendar day. Watching the market without placing a trade does not count. Days where you only manage existing positions also count as long as a position is open.
This matters for traders who want to rush through Verification. Even if you hit the 5% target on day one of Phase 2, you still need three more valid trading days before the account can graduate to funded.
The practical implication for planning: budget a minimum of 8 active trading days across the full 2-Step evaluation. For most traders operating 3-4 days per week, that means a two-week minimum timeline from challenge start to funded account, assuming clean execution and no breaches.
Is there a time gap between Challenge and Verification?
No. The transition from Phase 1 to Phase 2 is continuous.
When you pass the Challenge, your FTMO account status updates and Verification begins immediately. There is no mandatory cooling-off period, no waiting for a new account to be set up, and no additional fee to enter Phase 2. The evaluation continues on the same account.
This is worth knowing for traders who plan their trading schedule. You do not need to worry about a Phase 1 pass expiring or needing to act quickly. Once you pass, Verification opens and stays open under the standard rules.
The FTMO payout rules article explains what happens at the other end of this pipeline: once you have an FTMO Account, bi-weekly payouts become available after the initial 14-day trading period and 100% of your challenge fee is refunded with your first reward withdrawal.
How does this compare to the 1-Step Challenge?
The 1-Step Challenge removes Verification entirely. It is a single-phase evaluation: hit 10% profit target while staying within the loss rules, and you receive a funded FTMO Account.
The trade-off is stricter rules. The 1-Step uses a 3% daily loss limit (vs 5% for the 2-Step) and a trailing max loss rather than a static max loss. As the account equity grows, the trailing floor rises. This narrows your headroom over time and makes the 1-Step mechanically harder to manage even though there is only one phase.
The 1-Step also applies the Best Day Rule: no single profitable day can represent more than 50% of total positive profit accumulated across all days. This is a consistency enforcement mechanism built into the evaluation itself. The 2-Step has no equivalent rule.
Here is a direct comparison of the two paths:
| Feature | 2-Step Challenge | 1-Step Challenge |
|---|---|---|
| Phases to funding | 2 (Challenge + Verification) | 1 |
| Phase 1 profit target | 10% | 10% |
| Phase 2 profit target | 5% | None (no Phase 2) |
| Daily loss limit | 5% | 3% |
| Max loss type | 10% static | 10% trailing (EOD) |
| Best Day Rule | No | Yes |
| Minimum trading days | 4 per phase (8 total) | 4 |
| Profit split at funding | 80% base → 90% scaled | 90% from day 1 |
| Swing variant available | Yes | No |
The 1-Step is well suited to traders who want to reach funding faster and who can manage tighter intraday risk. The 2-Step suits traders who prefer more daily loss headroom and a longer, more measured evaluation window, including traders who run Swing strategies, since the 2-Step Swing variant allows overnight and weekend holding.
Paul has traded FTMO for approximately 4 years and withdrawn $15K+ in real payouts. He runs the 1-Step Challenge specifically, on Standard $50K and $100K sizes, using a scalping approach. For scalpers with tight stops and high trade frequency, the 3% DLL is manageable. The trailing max loss does require attention as the account grows. For swing traders or anyone who wants more room to breathe intraday, the 2-Step's 5% DLL is a meaningful advantage.
Which path makes sense for which trader?
Choose the 2-Step Challenge if:
- You trade swing positions or need overnight holding (use the Swing variant)
- Your strategy has occasional high-volatility days that could breach a 3% daily limit
- You prefer a longer evaluation runway and a lower second-phase target
- You want the Swing variant (there is no 1-Step Swing equivalent)
- You are newer to FTMO evaluations and want more risk headroom per session
Choose the 1-Step Challenge if:
- You scalp or daytrade with tight stops and predictable daily drawdown
- You want to reach the funded stage in a single phase
- 90% profit split from day one matters to you (vs 80% base on the 2-Step)
- You are comfortable managing a trailing max loss as your account grows
- You trade the same account size repeatedly and are familiar with how FTMO's loss mechanics behave
Neither path is universally superior. The 2-Step costs more in evaluation fees (2-Step Standard pricing runs higher than 1-Step for equivalent sizes) but offers more flexibility and a Swing variant. The 1-Step is faster and starts at a higher profit split but demands tighter discipline on daily risk management.
For traders comparing FTMO against other two-phase firms, FundedNext's evaluation structure and FundingPips' challenge path each run two-phase models with different loss rule configurations. For traders considering a futures alternative instead of Forex/CFD, Topstep and Apex Trader Funding run futures-only evaluations. FTMO does not offer futures.
The FTMO strategy guide covers how different trading styles interact with FTMO's specific rule set across both evaluation paths.
The bottom line
The FTMO 2-Step Challenge runs two sequential evaluation phases. Phase 1 (Challenge) targets 10% profit. Phase 2 (Verification) targets 5%. Both phases use the same 5% daily loss limit, 10% static max loss, and 4-day minimum trading requirement. The total minimum timeline is 8 active trading days.
Verification is not a second challenge. It is a consistency check at a lower bar. FTMO's logic is sound: a trader who can hit 10% and then hold 5% with the same discipline is demonstrably repeatable, not lucky. That is who they want to fund.
The 1-Step Challenge skips Verification but tightens the rules considerably. Lower daily loss limit, trailing max loss, Best Day Rule. Faster path, stricter execution.
Both paths lead to the same destination: an FTMO Account with bi-weekly payouts and a fee refund on your first withdrawal. The choice between them depends on your strategy, your drawdown tolerance, and how much time you want to spend in evaluation.
For everything else about the FTMO evaluation, see the FTMO review, FTMO FAQ, and FTMO rules overview.
Frequently Asked Questions
What is the difference between the FTMO Challenge and Verification?
The Challenge is Phase 1 of the 2-Step evaluation, requiring a 10% profit target. Verification is Phase 2, requiring 5%. Both phases apply the same 5% daily loss limit and 10% static max loss. Verification is not a harder gate. It is a consistency filter designed to confirm that Phase 1 performance was repeatable.
What is the profit target in Phase 1 of the FTMO 2-Step?
10% of the initial account balance. On a $10K account that is $1,000. On a $100K account that is $10,000. The target must be reached while staying within all loss rules at all times.
What is the profit target in Phase 2 (Verification)?
5% of the initial account balance, exactly half of Phase 1. On a $100K account that is $5,000. The loss rules (5% DLL, 10% static max loss) remain unchanged from Phase 1.
Can you fail Verification after passing the Challenge?
Yes. The 5% daily loss limit and 10% static max loss apply throughout Verification. Breaching either rule at any point ends the evaluation, regardless of how well Phase 1 went. Common causes are oversizing in the belief that the 5% target is easy, and giving back profits too quickly.
Does the 4-day minimum trading day requirement reset between phases?
Yes. Phase 1 and Phase 2 each require 4 separate trading days. Days from Phase 1 do not count toward Phase 2. The total minimum across both phases is 8 valid trading days before an FTMO Account can be issued.
Is there a time gap between Challenge and Verification?
No. The account transitions from Phase 1 to Phase 2 immediately upon passing the Challenge. There is no mandatory waiting period and no additional fee to enter Verification. Evaluation continues on the same account under the same rules.
Why is the Verification target halved to 5%?
The halved target tests consistency rather than raw performance. A trader who built to 10% steadily should have no trouble hitting 5% with the same approach. A trader who got lucky with a single outsized day will struggle to replicate that as a controlled 5% gain. FTMO uses this structure to fund traders who are repeatable, not just traders who got fortunate once.
Does the 2-Step Challenge have a time limit?
FTMO's published trading objectives do not state a hard deadline for the 2-Step path as of May 2026. Community references often cite 30 days for Phase 1 and 60 days for Phase 2 as typical windows. The evaluation does not fail by time; it fails only by breaching a loss rule.
How does the 1-Step compare to the 2-Step?
The 1-Step has one phase (10% target, no Verification) but uses a stricter 3% daily loss limit, a trailing max loss, and the Best Day Rule. It starts at 90% profit split from day one. The 2-Step has two phases, more daily risk headroom (5% DLL), a static max loss, no Best Day Rule, and an 80% base profit split scaling to 90%. A Swing variant is only available on the 2-Step.
What profit split do you get after passing the 2-Step?
80% base profit split from your first payout. This upgrades to 90% after meeting the FTMO Scaling Plan criteria: achieving 10% net profit over a 4-month period with at least 2 completed payouts. The account size also increases by 25% at each scaling milestone.
What happens after passing both phases?
You receive an FTMO Account (the funded stage). There is no profit target on the funded account. You trade under the same loss rules as your challenge type, payouts are available bi-weekly (average 8-hour processing), and 100% of your original challenge fee is refunded with your first reward withdrawal.
Does the Swing variant use the same Phase 1 and Phase 2 targets?
Yes. The Swing variant of the 2-Step Challenge uses identical 10%/5% profit targets and the same 5% DLL and 10% static max loss. The difference is trading flexibility: Swing allows overnight and weekend positions and removes news trading restrictions during the evaluation and on the funded account.