News Trading Rules Explained: What Prop Firms Actually Allow
Confused about news trading rules? Learn which prop firms allow news trading, which restrict it, and how to trade news without breaking rules.
Table of Contents
- 01What is News Trading?
- 02Types of News Restrictions
- 03Best Practices for News Trading
- 04Consequences of Breaking News Rules
- 05Our Recommendation
News trading can be incredibly profitable - or incredibly dangerous for your prop firm account. Understanding each firm's rules is crucial.
What is News Trading?
News trading involves opening or holding positions during high-impact economic events like:
- NFP - Non-Farm Payrolls (First Friday of each month)
- FOMC - Federal Reserve interest rate decisions
- CPI - Consumer Price Index (Monthly inflation data)
- GDP Reports - Quarterly economic growth data
- Central Bank Speeches - Fed, ECB, BOE statements
ā ļø Why Firms Restrict News Trading
During major news events, spreads widen dramatically (sometimes 10x normal), slippage increases significantly, and price can gap 50+ pips instantly. This creates extreme risk for both traders and firms providing the capital.
Types of News Restrictions
1. Full News Trading Allowed ā
No restrictions on trading during news events:
- FTMO
- The5ers
- Funded Next
- E8 Funding
2. Restricted Window (Most Common)
No NEW trades 2-15 minutes before/after major news. Holding existing positions is usually fine.
- MyFundedFX (2 min window)
- Alpha Capital (5 min window)
- Various others (check specific rules)
3. Complete Blackout š«
All positions must be closed before major events. Strictest approach.
- Some smaller firms
- Certain account types
Best Practices for News Trading
- Know your firm's rules before placing any trades
- Use an economic calendar (ForexFactory, Investing.com)
- Set alarms 15 minutes before high-impact events
- Reduce position size during volatile periods
- Trade the reaction, not the event - wait for direction to establish
- Wider stops if holding through news (expect slippage)
Consequences of Breaking News Rules
- First offense: Warning
- Profit removal: Profits from news trades voided
- Account breach: Challenge failed, account terminated
Our Recommendation
If news trading is core to your strategy, choose FTMO or The5ers where it's fully allowed. Don't try to "sneak" news trades at firms with restrictions - it's not worth losing your account.
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