Will the drawdown rule
end it?

Why the challenge fails on drawdown, not profit

Most people assume a prop-firm challenge is a test of whether you can make 10%. It is closer to a test of whether your position size survives a normal losing streak. Around 70–79% of failures come from breaching a loss limit — usually the daily cap, and usually on an ordinary morning. The FTMO fail-rate math walks through the same numbers.

At 2–3% risk per trade, two or three consecutive losses breach a 5% daily limit. At a 50% win rate, two losses in a row happen constantly. The rule does not care that the strategy is profitable over a year. It ends the attempt on the day.

What the simulator changes

There is a hump, not a straight line. Risk too little and the account cannot reach the target before the trading days run out. Risk too much and a normal losing streak breaches the daily cap. The pass rate peaks somewhere between, and the risk table shows where that peak is for your numbers.

At the defaults — no edge, four trades a day — the peak sits near 1%, where the daily rule almost never fires. Push risk to 1.5% and the daily drawdown becomes the dominant failure. That is the trade the passers make: they size for the rule, not for the target.

Note what the defaults mean. A 50% win rate at a 1.0 winner-to-loser ratio has zero expectancy. Even so, the rules alone let roughly a third of attempts through, because a random walk can reach the target before it reaches the floor. Real buyers do worse than this, because commissions and slippage make expectancy negative. A genuine edge raises the pass rate; costs lower it.

Where the model is wrong

Real trades are not independent. Losses cluster in volatile regimes, correlations rise in a sell-off, and slippage widens exactly when the strategy is losing. A simulation that draws each trade from the same distribution will overstate the pass rate, because it removes the clustering that ends accounts.

Treat the number as an upper bound on your odds, not a prediction. Then reduce risk until the bound is comfortable.

Before you pay the fee

A challenge fee is only worth paying if the strategy has already survived a recomputed backtest: baselines beaten, folds consistent, and the sample size large enough to believe. The prop-firm test is the last gate, not the first. Run the free checks in that order and most fees never need to be paid.

Questions

What percentage of FTMO traders fail?

FTMO reports a first-attempt pass rate around 7–10%. Independent estimates of the share of all challenge buyers who ever receive a payout are lower, often 1–2%. The dominant cause is a drawdown breach.

What risk per trade passes a prop firm challenge?

There is an optimum, not a minimum. Risk too little and you run out of days; risk too much and the daily cap ends it. In the default simulation the peak sits near 1% risk with four trades a day, and at 1.5% the daily drawdown becomes the dominant failure. The risk table shows the curve for your numbers.

Does a higher win rate guarantee passing?

No. Payoff ratio and position size matter as much. A 55% win rate at 1.5R can pass more often than a 65% win rate at 0.5R, because small winners take longer and expose the account to more drawdown.

Is this investment advice?

No. It is a model of a rulebook, not a forecast of returns. It does not know your execution, your market, or your broker.