New File—Change default file type to markdown

I have a command that I access with Ctrl+N. The function is as follows:

FileType NEW=.txt

It works as expected. However I normally work with Markdown files, with extenion .md. When I change it to the following:

FileType NEW=.md

Then nothing actually happens when I press my Ctrl+N hotkey. When I change it back to .txt, it works again.

Is there some limitation on what extensions can be used?

FileType NEW=.txt NEWNAME="New Document.md"

More detail in the How to Create New/Empty Files FAQ.

That works perfectly, thank you very much.