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FTMO soft breach vs hard breach, explained

Losing an account to a rule you half-understood is one of the worst feelings in funded trading. "Breach" gets used for two very different events, and the difference decides whether your account is gone or merely under review. Confirm the specifics against FTMO's live rules as you read.

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Two words doing two different jobs

Traders use "breach" as if it is one thing. In practice it covers two categories with sharply different consequences. A soft breach is a rule violation that may be reviewable, may trigger a warning, or may depend on context. A hard breach is a hard numeric line, usually an equity or drawdown limit, that ends the account the moment it is crossed. Confusing the two is how people relax when they should worry, and panic when they do not need to.

Prop firm rules change, and they differ across FTMO's account types and over time. Everything below describes the general shape of how these systems work. For the current figures, our FTMO rules page carries them with the date they were last checked, and FTMO's own objectives page is the authority.

What a soft breach usually looks like

A soft breach is typically a violation of a conduct or method rule rather than a blown equity line. The common examples people run into include things like prohibited strategies, holding trades against stated restrictions, or activity a firm flags as not in the spirit of the evaluation. Because these involve judgment, they are the category most likely to come with a review, a warning, or a case-by-case decision.

The key word is "may." A soft breach may be recoverable and may not, and that decision sits with the firm, not with you. You should never plan around leniency. But it is genuinely a different animal from hitting a drawdown floor, where there is nothing to review because a number was crossed.

Some things that feel like breaches are not breaches at all. On FTMO’s 1-Step, a best day worth more than 50% of the profit from your winning days is, in FTMO’s words, “not treated as a rule breach”: you keep trading until it is back to 50% or less. On the 2-Step, fewer than 4 trading days just means you trade another day. Neither one ends the account.

What a hard breach is, and why it is final

A hard breach is a line in the account's equity. On FTMO, once your equity drops below the daily loss limit or the maximum loss limit, the rule counts as violated and the attempt has failed, and climbing back later does not undo it. The two lines are the daily loss limit and the maximum drawdown. The exact percentages differ by account type and change over time, so we keep them in one place on the FTMO rules page with the date they were last checked. What matters more than the number is how each one is calculated, and that is the part worth reading twice on FTMO's own objectives page.

That calculation detail is where people get caught. On FTMO, the daily loss limit is measured from your balance at 00:00 CE(S)T (midnight Prague time), and your equity, open trades included, has to stay above it all day. Other firms use other starting points. A maximum drawdown may be static, meaning the floor stays fixed a set distance below your starting balance (FTMO’s 2-Step), or trailing, meaning it follows your highest balance up and never comes back down (FTMO’s 1-Step follows your highest end-of-day balance). The rule you breach is usually the one you skim-read. Our daily loss limit guide and maximum drawdown guide walk through the mechanics in plain language.

The hard breaches are the avoidable ones

A soft breach involves interpretation, so it is harder to design a simple rule around. The daily-loss and drawdown hard breaches are pure arithmetic. Avoiding one takes no judgment at all. It takes holding off the single trade that crosses a number you can work out in advance.

So the account-ending events are, mechanically, the most preventable ones. Nobody is asking you to predict the market. You only have to know your live distance to a fixed line and stop short of it. People step over it anyway, and almost never because they were unaware of the number. It is the loss that lands, the urge that spikes, and the "one more trade to make it back" that turns a bad day into a breached account. That is the same failure covered in our revenge trading guide. You can see exactly how close a single trade puts you to your line, in dollars and in trades remaining, with the free breach calculator, no signup.

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Where EXIT CODE fits

Soft-breach conduct rules involve a firm's judgment, and EXIT CODE stays out of that entirely. The arithmetic half is where it works, and it works at Gate 6, Session Limit. You enter your firm's daily figure and your drawdown floor once while calm, on your own cTrader or MetaTrader 5 account. Before every trade, Gate 6 reads your live equity against both and reports the closer of the two as a distance in dollars and in trades left at your risk. Reach the limit and the session locks, with no override button on the lock. That covers the pure-arithmetic breach and nothing else. Verify your firm's exact rules against FTMO directly.