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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. Here is the honest version, with the parts you should always confirm against FTMO's live rules.

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.

One important honesty note before the detail: prop firm rules change, and they differ across FTMO's account types and over time. Treat everything below as the general shape of how these systems work, not as the current rulebook. Always confirm the specifics against FTMO's live rules on their own site before you rely on them. Last verified: written to describe generic mechanics as of mid-2026, numbers unverified against the current FTMO rulebook.

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 rather than an automatic termination.

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.

What a hard breach is, and why it is final

A hard breach is a line in the account's equity or balance. Cross it and the account is done, usually automatically, with no review because none is needed. The two that end the most accounts are the daily loss limit and the maximum drawdown. These are the widely cited figures people work with: on a typical two-step evaluation, around a 5% daily loss limit and a 10% maximum loss, and on a one-step style evaluation, around 3% daily and 10% maximum. Confirm those exact percentages, and how each is calculated, against FTMO's live rules, because the calculation method matters as much as the number.

That calculation detail is where people get caught. A daily loss limit is often measured from a starting point that includes the previous day's closing balance or equity, and a maximum drawdown may be static or may trail your highest balance. The rule you breach is the one you did not read closely. Our daily loss limit guide and maximum drawdown guide walk through the mechanics in plain language.

The hard breaches are the avoidable ones

Here is the part worth sitting with. A soft breach often involves interpretation, so it is harder to design a simple rule around. But the daily-loss and drawdown hard breaches are pure arithmetic. They do not require judgment to avoid. They require you to not place the trade that crosses a number you can calculate in advance.

That means the account-ending events are, mechanically, the most preventable ones. You are not being asked to predict the market. You are being asked to know your live distance to a fixed line and to not step over it. The reason people step over it anyway is almost never ignorance 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

EXIT CODE does not interpret soft-breach conduct rules for you, and it will not decide a firm's review. What it does is make the arithmetic breaches hard to commit. It runs on your own cTrader or MetaTrader 5 account, and you enter your firm's limits once while calm. Before every trade, eight gates check it against those limits and return one word, CLEARED or BLOCK. The daily-loss lockout and the distance-to-drawdown check are gates, and a BLOCK has no override button. It gives no signals, predicts nothing, and promises no pass and no profit. It just removes the trades that cross the lines you already know are there. Always verify your firm's exact rules against FTMO directly.