In this article, Global Finance Trading investigate the differences between the FTMO swing vs normal trading accounts including rules and leverage of each account.
FTMO Swing Account
The FTMO Swing account provides a different approach, which has greatly increased in value since the changes made to the evaluation time frame. Now that the evaluations are no longer within a 30 day period, giving the trader unlimited time to reach the targets.
Major Differences Between FTMO Normal and FTMO Swing Accounts
The major differences between the FTMO swing and FTMO normal account are
- The Leverage
- Permitted times to trade
- News Events
- Holding Overnight and Weekend
- Keep an eye on drawdown
FTMO Swing Account Leverage
Swing account leverage is limited to 1:30 leverage, meaning that 100,000 units of a currency can be divided by 30 times, to work out the value of margin you need to trade one lot.
The difference for a normal account is that the margin requirement is less, since the leverage is higher, set at 1:100 for the normal account users.
The benefits of higher leverage is that the trader can place more trades or more lots compared to a swing trade account.
The drawback to this is that the higher lots can lead to faster losses, making the drawdown rule hard to maintain at times, for those that are likely to overleverage there account and trade with too big of a lot size.
Slow and steady can bring a more methodical approach to trading with FTMO, and keep a live account alive for longer.
The 1:30 leverage is more than enough to pass the challenge, and can sometimes protect the trader from overleveraging in the heat of the moment.
FTMO Swing Account Drawdown
The drawdown for FTMO swing accounts remains the same as the normal account. Be sure to keep in mind that the open trade swings of overnight loss or profit may make the drawdown limits for that particular day a little harder to work out without simply checking your FTMO client area, since the account might be in profit or loss of x at the time the new day starts.
For example, if you start the new day at -$1,000 your drawdown would be say $10,000 for the day (on a 200k account), so let’s say the total loss of those trades gets to -$10,000 you could still have an additional $1,000 of loss limit, since the day started at a loss of $1,000.
For the swing account, it is important to keep an eye on the daily drawdown, due to the overnight movement potential that can skew the open trade P&L compared to a normal account.
Another example where it might be even more confusing, is if the open trades starts the day at $5,000, then throughout the same day the open loss gets to -$5,000, the account could potentially hit $10,000 daily drawdown, failing the challenge.
FTMO Swing Account News Trading
News trading isn’t restricted for swing traders, so trading during news events is allowed in evaluation, verification and funded account stages.
In short, FTMO allows swing trading accounts to trade during news events.
This is different for normal accounts, where trading isn’t allowed for certain news events on certain pairs.
For ease of trading and peace of mind, a swing trading account is easier to work with, since it removes the chance of not being aware of restricted news events.
FTMO Swing Account Hold Trades Overnight and Over Weekends
FTMO Swing accounts can hold trades overnight and over weekends even once funded.
This means that it can be far easier to code algorithms (without having to program in close times) or close trades earlier than you want to simply because of a trading restriction.
Is it Better to have an FTMO Swing Account or Normal Account?
While it’s open to opinion, here’s the take at Global Finance Trading.
Before the change to unlimited time to pass (where you only had 30 days to hit 10% target), the swing account would have been a challenge to get to the target with the volume you could trade (depending on your strategy of course).
Now that the time limit is removed, the swing account is far superior for a number of reasons.
If you’re looking to make massive gains in short periods of time, it’s probably not going to be consistent. As a trader that is looking for consistent income, large capital amounts that are hard to replicate aren’t the goal, because once it runs out, who’s to say you can get that sort of money again.
When consistent income covers base living and some, it makes career, business and financial decisions far easier and also takes the pressure out of day to day life. You reclaim freedom. Many traders are just seeking a quick buck and that’s the attitude that keeps bad traders broke.
Since a swing account allows for holding trades regardless of the condition or time of the market, it allows for more options and opportunities to trade and implement strategies that aren’t available to FTMO normal account holders.
Using Expert Advisors (EAs) and longer term strategies might be used to pass the evaluation, but once you’ve passed you still want to make money. A swing account allows the trader to continue trading as they were, without having to change strategy or be cautious with their EA close times and avoid news events (either coded or manually). This would save a lot of hassle long term.
The leverage shouldn’t be an issue and if it is, you’re probably overleveraging your account. In fact, a swing account might save you from making silly mistakes and going in too hard on trades, risking the drawdown stops to be hit.
Swing or Normal FTMO
If you’re serious about long term income potential and consistent trading, the FTMO swing account is the far superior option now the evaluation isn’t under a time limit.
Just think, if you can make a few percent consistently on a big account, with a level of certainty, what would that do for your life?