My Next Trading Challenge – And My Issue with FTMO (2024)

I have recently passed and received myfirst funded accountwith Prop Firm FTMO, and am in the process of taking on my next trading challenge for another $130,000 of funding. Instead of taking my challenge with FTMO, I have decided to partner with another prop form, Lark Funding. Lark Funding is a new prop firm on the scene, and today we will cover why I decided not to go for another FTMO challenge, and the issues I have with FTMO.

What is Lark Funding?

Lark Fundingis another new proprietary trading firm on the scene. I have covered exactly what a prop firm in another blog, but essentially its the best way for a trader to make a significant income off their trading once they are consistently profitable.

All prop firms will have a trading challenge which traders will need to pass in order to gain access into their funding. Lark Funding has a one phase challenge, whereasFTMOis a two phase. In the trading challenge, the trader is required to make a 10% return on their account. There is a 4% daily drawdown allowed, and a 5% maximum drawdown allowed. Once funded, Lark offers a 75% split to traders on profits, which is actually lower than FTMO. The split isn’t the real reason why I decided to take the challenge with Lark.

The real reason behind my decision to take Lark Fundings challenge is the time limit. As a result of there being no time limit on how long you need to pass the challenge, whereas the first stage, which is the more difficult for FTMO, is 30 days. I personally, if I am trading to my standard risk parameters, would very very rarely return 10% in a month. 99% of tradings would not be able to sustainably return 10% on an account. Therefore, what most traders, including myself, would need to do is to break your rules when it comes to risk manegement. I typically risk 1-2% per trade, whereas on my challenge, I was risking 2-2.5% per trade. This is not ideal. I am an advocate for always following your rules. Howevever, its difficult to be able to follow your risk management rules and return 10% in a month.

Lark Funding’s process is alot more sustainable, as there is no time restriction for you to return 10%. If you can return 10%, without a drawdown of 5%, you are a pretty decent trader. I don’t think that the challenge process with FTMO is sustainable as it forces traders to potentially break their rules and trade with more risk than they should be. I have covered this before in anotherblogwith my thoughts on the FTMO process.

Drawdown is Coming

There is estimated to be a 90% fail rate of traders that take the FTMO challenge. The reason behind this is due to traders chasing the profit target with a time restriction in place. A trader doesnt know when a winning streak might occur, or when they may take a string of drawdowns. This is one of the main reasons why I decided to not go back to back with another FTMO challenge.

I had my best ever trading month inAugust, and some of the reason of how I passed my challenge first attempt is due to luck. But I know that after a fantastic trading month, I am bound to have a period of drawdown coming soon. I know that the probability of me passing another FTMO challenge, due to the time limit in place, would be very low. This is the main reason why I decided to go with Lark Funding. The no time limit allows me a bit more time to be able to potentially get through my drawdown, as variance will come into play after a long winning streak. My goal is to be trading around $200,000 in funded accounts by the end of the year, and going with Lark will assist me in acheiving this.

The cons of Lark Funding

Now there are going to be parts of the process where FTMO is significantly better than Lark in. This is the reason why they are the largest funder of Forex Prop Traders. There are 3 main cons when it comes to Lark Funding;

1. Profit Split

The profit split for lark is 75% – 25%, compared to 80% – 20% with FTMO. This means that the trader takes a little less of their profits than what we do with FTMO.

2. Cost

The major difference is the cost of the challenge. If we compare the cost of a $50,000 account across both, the challenge fee is about $50 more in Lark than FTMO. On top of this, with FTMO, once you receive a profit from your funded account after passing the second phase, the fee charged for the challenge is refundable. With Lark Funding, instead of being refundable, they give you a free attempt for another funding account. I do like the idea of giving the successful trader the free attempt of another account, however understand that as a new business they would rely more on the challenge fees to fund their business than FTMO would.

3. Time Constraints

The major reason behind why I decided to take a Lark Funding Challenge was the timing constraints of FTMO. Because I have had such a great run I am expecting a drawdown to come soon, and theres no point throwing money away with FTMO. I personally think putting a timing constraint on a challenge will make a trader gamble, more than sustainably manage their money. This is why I believe in Larks funding process, and recommend any trader looking to take a challenge to partner with Lark first.