Prop Firm News Trading Restrictions: What You Need to Know
Most prop firms restrict or ban trading during major news events. This means you cannot open or hold positions within a window (usually 2 to 5 minutes) before and after high-impact economic releases like Non-Farm Payrolls, FOMC decisions, or CPI reports.
Why Prop Firms Restrict News Trading
News events cause extreme volatility and unpredictable price gaps. During these moments, slippage can be massive, and prices may jump well past your stop loss.
For prop firms operating on simulated accounts, this creates a problem. Traders can take oversized risks on news events with no real downside. If the trade works, they profit. If it doesn’t, they just reset or buy a new evaluation. This asymmetric risk is why firms impose restrictions.
Some firms also struggle with liquidity feeds during news events, and fills on simulated platforms may not match real market conditions.
Common News Trading Rules
The specifics vary, but here are the most common restrictions:
- Blackout windows: No opening trades within 2 to 5 minutes of scheduled high-impact news. Some firms extend this to 15 minutes.
- Close-only periods: You may need to close all open positions before the news window begins.
- Specific events only: Some firms only restrict a handful of events (NFP, FOMC, CPI), while others restrict all red-flag calendar events.
- Evaluation only: A few firms restrict news trading during the challenge phase but allow it once you are funded.
Always check the specific rules of your firm. Violations can result in failed evaluations or account termination.
How to Trade Around News Restrictions
Plan your trading day around the economic calendar. Sites like ForexFactory and Investing.com publish schedules of high-impact events well in advance.
If your strategy relies heavily on news volatility, consider firms that allow news trading. Check our roundup of prop firms that allow news trading for options.
For everyone else, simply avoid entering positions 30 minutes before major releases to give yourself a comfortable buffer beyond the firm’s minimum requirement.
Key Takeaways
- Most prop firms restrict trading within 2 to 5 minutes of major news events
- Restrictions exist because news volatility creates asymmetric risk on simulated accounts
- Rules vary widely: some firms restrict all news, others only a few key events
- Check your firm’s specific policies; violations can cost you your account
- Plan around the economic calendar to stay compliant
Frequently Asked Questions
What happens if you accidentally trade during a news event? Most firms will flag the trade as a rule violation. Depending on the firm, this could mean an automatic evaluation failure or a warning. Some firms simply void the trade’s profits.
Do all prop firms restrict news trading? No. Several firms allow unrestricted news trading, especially those focused on futures markets. Always verify before signing up.
Can you hold a trade through a news event? Some firms allow you to hold existing positions through news as long as you didn’t open them within the blackout window. Others require you to be completely flat. Read the fine print.
Risk Disclaimer: Trading involves substantial risk of loss. Past performance is not indicative of future results. See our full risk disclaimer.