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FTMO 1-Step vs 2-Step? What I Wish I'd Known Before My First Challenge
You're signing up for your new FTMO Challenge and you land on this page. Which one do you choose?
I learned the hard way that there's a huge difference. Especially if you're coming from a regular account to a prop firm. And especially if you're one of my students and you're used to compounding, scaling your entries up with your profits (and down with your losses). I blew my first 1-Step in 3 trades using our usual rules, before I even knew what was going on. So here goes.
If you can risk 0.5% per trade and stick to it, the 1-Step is the better buy. If you can't, or won't, take the 2-Step. That's the short answer. The rest of this post is how I got there.
Look at those two boxes again. The numbers look almost the same. 10% max loss on both. Unlimited time on both. Up to 90% on both. So what's the actual difference?
It's buried in two little words next to the 1-Step max loss: EOD Trailing. Honestly, I read past it the first time. Then it got explained to me and I still didn't get it. So I'm going to go slow here, because I'm pretty sure I'm not the only one.
Here's what we'll cover:
What each challenge actually asks of you
The "moving floor" — static max loss vs trailing max loss, with real dollar numbers
The 3% daily loss and the Best Day Rule
What changes (and what doesn't) once you pass
Why dropping your risk from 1% or 1.5% down to 0.5% is what makes the 1-Step safe
How to size the trade, and why a fixed entry beats a percentage in a prop account
How to take profits: reset or grow
The questions I asked along the way, and the answers
FTMO 1-Step vs 2-Step - The two challenges, side by side
On paper they look like twins. Three rows are where they split: max loss type, daily loss, and the Best Day Rule.
Rule | 2-Step | 1-Step |
Phases | Two: Challenge, then Verification | One |
Profit target | 10%, then 5% | 10% |
Max loss | 10%, static | 10%, end-of-day trailing |
Max daily loss | 5% | 3% |
Best Day Rule | None | Best day must be under 50% of total profit |
Minimum trading days | 4 | None listed |
Trading period | Unlimited | Unlimited |
Profit split | Starts lower, scales up to 90% | 90% from the first payout |
Challenge fee | Refunded with your first payout | Not refunded |
The moving floor: static vs trailing max loss
Both accounts let you lose 10%. The difference is what the 10% is measured from. On the 2-Step it's measured from where you started. On the 1-Step it's measured from your best day.
Let's use a $100,000 account for everything in this post. Swap in your own size; the percentages work the same.
Think of the max loss as a floor
Your max loss is a line your account can never touch. I call it the floor. If your balance hits the floor, the account is done. Doesn't matter if it's 10 a.m. on a Tuesday and you'd have come back by Friday. Done.
2-Step: the floor is bolted down. On a $100k account the floor is $90,000. Forever. You make $8,000? Floor is still $90,000. You make $20,000? Still $90,000. Every dollar you make is new space between you and the floor.
1-Step: the floor follows you up the stairs. It starts at $90,000 too. But it's tied to your best closing balance with a $10,000 rope. Every time you close a day at a new high, the floor gets pulled up behind you. And it's a one-way pull. When you have a losing day, the floor does not come back down.
So on the 1-Step, making money doesn't give you more room. It just moves the room up. You never have more than $10,000 between you and failure, measured from your best day.
That was the part that didn't land for me at first. I kept thinking "10% is 10%." It is. But on the 2-Step your 10% grows into 15%, 18%, 20% of cushion as you profit. On the 1-Step it's always 10% from the top, and every pullback from a new high eats into it.
The chart below runs the same seven trading days through both accounts. Same trades, same balance. Only the floor is different.
Read it from left to right. The account runs up to $108,000 on Day 4, then gives back $8,500 over three days. It's still within $500 of where it started. On the 2-Step, that's a pullback with $9,500 of room left. On the 1-Step, the floor climbed to $98,000 on the way up and stayed there, so one more bad day ends the account.
How the trailing max loss actually behaves
Three rules run the 1-Step floor. Once these click, the whole thing makes sense.
It only moves at the end of the day. FTMO updates the floor once a day, after the close at 23:59:59 Prague time. That's about 6 p.m. New York, or around noon to 1 p.m. here in Hawaii depending on the season. If you're up $4,000 at lunch and give it all back by the close, the floor doesn't move. Only your closing balance counts.
It only moves up. A new closing high pulls the floor up. A losing day leaves it where it was. It never steps back down to give you room again.
Your equity can't touch it at any time. The floor moves once a day, but it's checked all day. Open trades count. If a trade is floating red and your equity dips to the floor, you're out, even if that trade would have closed green an hour later.
Where rule 3 bites
Say your best close so far is $108,000. Your floor is $98,000. You've had two rough days and today opens at $101,000. You have $3,000 of room. Not $10,000. Not $11,000 like you'd have on the 2-Step from that same balance.
Now you take a trade and it runs against you $3,000 before it turns. On the 2-Step, that's an annoying morning. On the 1-Step, the account is gone. (Wanna know how I know?) And look at the balance: $98,000. Still not that far below where you started. You didn't blow up. You just gave back more than the rope allowed.
That's the trap. You can fail the 1-Step while still close to your starting balance, if you got there by running up first and then pulling back.
What happens to the floor when you get paid
I wondered if the floor ever stops climbing. Some firms lock it at your starting balance once you're up 10%. FTMO doesn't. Instead, it resets: when you withdraw a payout and get a new FTMO Account, the floor goes back to 90% of your starting balance. On $100k, that's $90,000 again, with your full $10,000 of room. (FTMO Trading Objectives)
So on the 1-Step, a payout is your escape valve. Every time you get paid, the floor starts over. That changes how you should take profits, which I'll get to below.
One more detail from FTMO's own wording: the 1-Step max loss is balance-based end-of-day trailing. The floor follows your closed balance at the end of the day. If you hold a trade overnight that's up $3,000, the floor doesn't move up for it. Only closed profit raises it.
The other two rules: 3% daily loss and Best Day
Daily loss: 3% vs 5%
On a $100k account, the 2-Step lets you lose $5,000 in a day. The 1-Step lets you lose $3,000.
This is the one that gets people on a normal bad day. Not necessarily a blowup, but three losers in a row will get ya. If you risk 1% a trade and take three trades, three stop-outs is exactly 3%. Add a commission or a pip of slippage and you're over. On the 2-Step that same day is a bad day you walk away from, on a 1-Step, you lost the account. (I learned that one the hard way too.)
And like the max loss, open trades count. A floating loss on a trade you haven't closed yet is already eating your daily limit.
Best Day Rule: no single day can carry you
On the 1-Step, your best day's profit has to be less than 50% of your total profit. Hit 10% with one 6% day and four small days? You don't pass yet. You keep trading until the rest of your days add up to more than that 6% day.
On its own that sounds fine. Here's why it matters for us. A lot of BTMM-style trading makes the week on one clean move. The cycle sets up, you catch the run, and that one trade is the whole week. That's exactly the kind of day this rule is built to slow down.
The fix isn't to avoid big days. The fix is to make sure no single day is big relative to the account. We'll get to how in the risk section.
After you pass: the rules come with you
I assumed the strict stuff was just for the test. It's not. Whichever challenge you pick, those are the rules you'll trade the funded account under.
1-Step funded account: the 10% end-of-day trailing max loss stays. The Best Day Rule stays too, and now it decides when you get paid. To be eligible for a payout, your best day still can't be more than 50% of your total profit. The upside: 90% split from your first payout.
2-Step funded account: the floor stays bolted down, daily loss stays at 5%, no Best Day Rule. The split starts lower and scales toward 90%. You also get your challenge fee back with your first payout.
New on both once funded: your biggest loss on a single trade idea shouldn't be more than 3% of the account. At the risk levels in the next section, you'll never get near it.
This is where the static floor matters most. Once you're funded and paid, every dollar you leave in a 2-Step account is permanent cushion. In a 1-Step account, the floor keeps climbing after you. (I personally didn't like that.)
Why 0.5% risk is what makes the 1-Step safe
At 1% or 1.5% per trade, the 1-Step's rules are tight enough to take you out on an ordinary bad stretch. At 0.5%, they barely touch you. Same rules, same trader. The only thing that changed is size.
Most of us were taught 1–2% per trade. That's fine on a personal account or a 2-Step with 5% daily room. On the 1-Step it runs right into all three rules at once. Here's what each risk level does on a $100k account with a max of 3 trades a day:
Risk per trade | $ risked | A day with 3 losers | Losses in a row (from your peak) before the trailing floor | Trades' worth of profit (R) to hit 10% | A single 4R winning day |
1.5% | $1,500 | Fails on the 2nd loser (3%) | 7th loss fails | about 7R | 6%: too big for Best Day at a 10% total |
1% | $1,000 | Fails or comes within a pip (3% + costs) | 10th loss fails | 10R | 4%: just under the 5% cap |
0.75% | $750 | -2.25%, you survive | 14th loss fails | about 13R | 3%, comfortable |
0.5% | $500 | -1.5%, half your daily room left | 20th loss fails | 20R | 2%, never an issue |
Loss counts ignore commissions and slippage, which make every row a little worse.
What 0.5% buys you on each rule
Daily loss. Your worst possible day, three full stop-outs, is -1.5%. That's half the limit. Even with a bad fill or a fourth trade you shouldn't have taken, you're still in the game tomorrow.
Trailing max loss. Remember the rope from earlier. At 0.5%, that $10,000 rope is 20 full losses long. At 1.5% it's less than 7. Twenty losers in a row from your best day is a lot. Seven is one rough week. The rope didn't get longer. You just take smaller steps on it.
Best Day. A 4R day, the kind where the cycle sets up perfectly and you catch the whole move, is 2%. You'd need several days like that to reach 10%, so no single day can be half your profit. The rule takes care of itself.
What it costs you
Time. At 0.5%, 10% is 20R of net profit. At 1% it's 10R. So you'll be in the challenge roughly twice as long.
But the trading period is unlimited. Nobody is rushing you except you. The biggest risk with this whole plan is getting bored three weeks in and bumping size "just for this one setup." That one decision undoes everything in the table above.
If 0.5% feels painfully slow, 0.75% is a workable middle. I'd go there only once you're up a few percent and the floor isn't breathing on you.
Sizing the trade at 0.5%
You don't change your setup. You change your lot size. Your stop goes where the structure says it goes, and the lots shrink to fit 0.5%.
For EURUSD (and other pairs quoted in USD), one standard lot is worth about $10 a pip:
On a $100,000 account at 0.5%, you're risking $500. Here's what that looks like at different stops:
Stop (pips) | Lots at 0.5% ($500) | Lots at 1% ($1,000), for comparison |
10 | 5.0 | 10.0 |
15 | 3.3 | 6.7 |
20 | 2.5 | 5.0 |
30 | 1.7 | 3.3 |
Smaller account? Scale it. A $50k account at 0.5% is $250 of risk, so cut every lot number in half. A $25k account, cut it to a quarter.
One more thing: size off your starting balance, not your current one. If you size up as the account grows, your risk grows right along with the floor, and you're back to taking big steps on a short rope.
Wait, not a percentage of the account?
This one tripped me up, because I teach percentage risk. On your own account it's the right habit. Your wins compound, and when you lose, your size shrinks with the account.
But that logic assumes the thing you can lose is your whole balance. In a prop account, what you can lose is the distance to the floor. On the 1-Step that distance never gets bigger than $10,000, no matter how much you make. So percentage-of-balance sizing works backwards here:
When you win, your trades get bigger while your room stays at $10,000. You're compounding size against a cushion that isn't growing.
When you lose, it barely helps. 0.5% of $99,000 is $495 instead of $500. Your size hardly moves while your room shrinks by the full loss.
The account is measured against a fixed standard, so your base risk should be fixed too. The only thing that should change your size is the only thing that changes your danger: how close you are to the floor.
The rule I'm using: a standard entry with step-downs
Fixed dollars by default. Step down only when the room shrinks. Never step up. This keeps the part of scaled risk I like (size down when it's going badly) and drops the part that doesn't fit (size up when it's going well).
For a $100k 1-Step, where room = balance minus floor:
Room to the floor | Risk per trade | Losses left at that size |
$7,000 or more | $500 (standard) | 14 or more |
$4,000 to $7,000 | $250 | 16 to 28 |
Under $4,000 | $150 | 10 to 26 |
Under $1,500 | Stop. Reset, review, paper trade | - |
Say you run up to $108k (floor $98k) and pull back to $104k. Room is $6,000, so you drop to $250. You go back to $500 once room is above $7,000 again, which on the 1-Step usually means a new closing high.
Each step stretches your remaining room over more trades. A losing streak slows down instead of speeding up. And at every tier, three trades a day stays well under the $3,000 daily limit.
Taking profits: reset or grow?
Once I let go of percentage sizing, the next question was obvious. If my lot size isn't growing with the account, how does the account grow at all?
In a prop account you don't grow by increasing lot size. You grow by getting paid, and over time by getting a bigger account. Which challenge you pick decides how that works.
1-Step: take every payout and reset. Profit left in a 1-Step account does nothing for you. The floor just climbs up behind it. But a payout resets the floor to 90% of your starting balance and gives you your full room back. So the routine is simple:
Trade your standard entry.
Request a payout as soon as you're eligible. The first one opens 14 days after your first trade on the funded account.
Start over at your starting balance with full room. Repeat.
Your growth is cash in your pocket, plus the 90% split from day one.
2-Step: this is the one that lets you grow inside the account. The floor is fixed, so profit you leave in is real cushion. You can let a buffer build, then raise your size a bit, because your room actually got bigger. The 2-Step also has FTMO's scaling plan, which can take your split from 80% to 90% and grow the account size if you meet the conditions. A common middle ground: leave a buffer of a few percent in for safety and bigger size, and withdraw everything above that.
The other way to size up: buy a bigger account. On either challenge, you can pass on a small account, prove the process, then buy a larger one and pass again. On the 1-Step, that's really the main way your lots grow. Same 0.5% standard, just on a bigger starting balance.
Before you buy: checklist
Click the "i" next to Max Loss. Read it all the way through, then plan your payouts. On the 1-Step, each payout resets the floor.
Confirm the daily loss counts open (floating) trades. Assume it does until you see otherwise.
Write your risk on a sticky note: 0.5% = $___ on my account size.
Pre-calculate your lot size for your usual stop so you're not doing math with a setup in front of you.
Set your daily cap: 3 trades max, and stop for the day after 2 losers if that's your rule.
Decide now what you'll do on week three when it feels slow. (Answer: nothing. Keep 0.5%.)
The questions I actually asked
These are the questions I had while working through this, more or less in the order they came up. If you're stuck on one, you're not behind. I was too.
Explain the max loss.
Same 10% on both. On the 2-Step it's measured from your starting balance and never moves. On the 1-Step it's measured from your best closing balance and follows you up. See the chart above.
What about after the evaluation? Does it change?
No. Whatever you pick, you trade the funded account under the same max loss and daily loss. On the 1-Step, the Best Day Rule carries over too, and it decides when you get paid.
So the 2-Step is best?
At 1% risk or more, yes. The extra room forgives a lot. That's where I landed first.
That won't mess up my trading style?
Not at 0.5%. What would hurt is drifting back to 1% or more, or letting open trades run deep red. Floating losses count against the floor in real time.
So I keep a static entry each time instead of a percentage?
Yes. Same dollar risk every trade, based on your starting balance. That's static risk, not static lots. The lots change with your stop so the risk stays the same.
So risking a percentage where wins compound, and losses make the position smaller won't work here, right?
Right for your own money. In a prop account, what you can lose is your room to the floor, not your balance, so percentage-of-balance sizing compounds against a cushion that isn't growing. See "Wait, not a percentage of the account?" above.
Is there a better rule than a percentage?
A standard entry with step-downs: fixed dollars, scaled down only as room shrinks, never scaled up. The table is in the sizing section.
How do I take profits if I'm not growing the account?
You grow through payouts and bigger accounts, not bigger lots. See "Taking profits: reset or grow?
Is it best to take profits above my starting balance and reset, or grow it?
On the 1-Step, reset. Each payout gives you your full room back. On the 2-Step, either works, and growing is a real option because the floor stays put.
So which one is yours best bet?
Pick the 1-Step if you'll actually trade 0.5% per trade (0.75% at most), you size off your starting balance, and you're okay with the challenge taking a while. You get one phase, no minimum days, and 90% from your first payout. At that size the tight rules mostly stop mattering.
Pick the 2-Step if you like trading at 1% or more, you tend to make your money in one or two big days, or you know yourself well enough to admit you'll size up when it gets slow.
Also if you want to grow your lot size inside the account over time, the 2 step is the way to go since the fixed floor lets profit become real cushion. The static floor and the 5% daily room forgive a lot. You trade some speed and some of the early split for that forgiveness, and you get your fee back.
Which did I choose between FTMO 1-Step vs 2-Step?
When I first looked at these two I leaned 2-Step, because I wanted the room. Then I realized I didn't need the room. I needed to stop taking up so much of it. The 1-Step's rules aren't really harder. They just don't let you get away with oversized trades. Lower the risk, and the "harder" account turns into the faster, better-paying one.
Where am I now? Honestly, the 2-Step is pulling me back a little. Eventually I'd like to trade a bigger lot, and the 2-Step lets the account grow into that.
Whichever you choose, decide your risk before you buy. The challenge you pick and the size you trade are one decision, not two.
Next up, Part 2: My Exact Plan for a $10K FTMO Account. The lot size for my first trade, how my size changes once I'm funded, and exactly when (and how much) I'm pulling out.
Size small, think big, and go pass that thing.
See you in the Tribe, E
The usual fine print: This is my own experience and how I'm choosing to trade, not financial advice. Trading involves real risk, and you can lose money, including challenge fees. The dollar examples here are made up to show how the rules work. FTMO's rules were current as of October 2026 and can change, so read the objectives on their site before you buy.
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