Most failed challenges are not failed by a bad strategy. They are failed by size: a few normal losses at too large a position, and the daily or maximum loss limit is gone. Sizing from the firm’s limits backwards fixes that.

Step 1: decide risk per trade

Start from the tightest limit. On FTMO’s 2-Step, the daily loss limit is 5 per cent and the maximum loss 10 per cent of the starting account. A common rule is to risk no more than 0.5 to 1 per cent of the account per trade, so that five losing trades in a row still leave you inside the daily limit.

Step 1: decide risk per trade. 0.25%: $250: 20: 40; 0.5%: $500: 10: 20; 1%: $1,000: 5: 10; 2%: $2,000: about 3: 5
Step 1: decide risk per trade: the figures from this section at a glance.
Risk per tradeOn $100,000Losses in a row to hit a 5% daily limitLosses in a row to hit 10% maximum loss
0.25%$2502040
0.5%$5001020
1%$1,000510
2%$2,000about 35

At 2 per cent a trade, three ordinary losses in a day end a 2-Step account and a streak of five ends any account. At 0.5 per cent you need ten losses in one day.

Step 2: turn risk into lots

Position size in lots = money at risk ÷ (stop loss in pips × pip value per lot). On EUR/USD and other pairs quoted in US dollars, one standard lot is worth about $10 a pip.

Illustrative example: sizing one trade

On a $100,000 challenge, risking 0.5 per cent means $500. With a 25-pip stop on EUR/USD: $500 ÷ (25 × $10) = 2 lots. With a 40-pip stop the same risk is $500 ÷ (40 × $10) = 1.25 lots. The risk stays fixed; the lot size moves with the stop.

On pairs not quoted in dollars, such as USD/JPY, the pip value changes with the exchange rate, so recalculate it or use a calculator.

Our prop firm calculator and position size calculator do this arithmetic for you.

Step 3: cap total open risk

Firms measure equity, including open trades. Three trades open at 1 per cent risk each is 3 per cent of exposure if all three hit their stops together, which is easy when the trades are correlated, such as EUR/USD and GBP/USD long. Add up the risk of every open position and keep the total well inside the day’s remaining room.

Step 4: shrink after losses

When you are close to a limit, cut size. If you are 3 per cent down on the day against a 5 per cent limit, a full-size loss takes you to 4 per cent and a second one ends the account. Halving size after a loss, or stopping for the day at your own lower limit, keeps one bad session from ending a challenge.

Doubling size to “win back” a loss is the fastest way to fail. The target can wait; FTMO sets no time limit.

Frequently asked

How much should I risk per trade on a prop challenge?

Commonly 0.5 to 1 per cent of the account. At 0.5 per cent on a $100,000 account you would need ten losing trades in one day to reach a 5 per cent daily loss limit.

How do I calculate lot size for a prop challenge?

Divide the money you are risking by the stop loss in pips times the pip value per lot. Risking $500 with a 25-pip stop on EUR/USD, at about $10 a pip per standard lot, gives 2 lots.

Do open trades count towards the daily loss limit?

At FTMO, yes: equity, including open trades, must stay above the daily limit. Add up the risk of all open positions, especially correlated ones.

Should I trade bigger to pass faster?

No. Larger size makes a run of normal losses fatal. Most firms, including FTMO, set no time limit, so a slower pass at safe size is the better plan.