News Trading Rules
Non-Farm Payrolls just dropped. You caught a 200-pip move on EUR/USD in 30 seconds. Incredible — except your prop firm just flagged you for a news trading violation and your account is gone. Here's how to avoid this nightmare.
Why Do Firms Restrict News Trading?
During major economic releases (NFP, CPI, FOMC, GDP), markets experience extreme volatility and widened spreads. For prop firms using simulated or demo feeds, the price execution during these events diverges significantly from live markets. Allowing unrestricted news trading on sim accounts creates an artificial edge that doesn't exist in real trading.
Most firms that restrict news trading only do so on funded accounts, not during the evaluation/challenge phase. This catches many traders off guard — you pass using news events, then can't replicate the strategy when funded.
Three Levels of News Restrictions
Level 1: No Restrictions
You can trade freely through any news event. These firms typically have their own risk management built into spreads or slippage settings.
Examples: FTMO, FundedNext (evaluation), Apex (evaluation), Bulenox (evaluation)
Level 2: Restricted Window
You cannot open or close trades within a specific time window around high-impact events — typically 2-5 minutes before and after the release. Existing positions may remain open but some firms force-close them.
Examples: Take Profit Trader (funded), Topstep (funded), Earn2Trade (funded)
Level 3: Full Ban on News Days
On certain calendar days (FOMC, NFP), you simply cannot trade at all or must close all positions before the event. This is the strictest level and is becoming less common.
Examples: Rare — some smaller firms
High-Impact Events to Watch
| Event | Frequency | Markets Affected | Volatility |
|---|---|---|---|
| Non-Farm Payrolls (NFP) | Monthly | All | 🔴 Extreme |
| FOMC Rate Decision | 8x/year | All | 🔴 Extreme |
| CPI (Inflation) | Monthly | All | 🟠 Very High |
| GDP Report | Quarterly | All | 🟡 High |
| ISM PMI | Monthly | Futures | 🟡 High |
| Retail Sales | Monthly | USD pairs | 🟡 Moderate-High |
Pro tip: Bookmark ForexFactory.com/calendar and always check for red-folder events before your trading session. Set a phone alarm for 5 minutes before each high-impact release.
Evaluation vs. Funded: The Critical Difference
During Evaluation
Most firms allow unrestricted news trading during the challenge phase. This means you can use NFP and FOMC moves to hit your profit target.
When Funded
News restrictions kick in. If your strategy relies heavily on news events to generate profits, you may pass the challenge but struggle or get flagged on the funded account.
Warning: Always check the funded account rules (not just the evaluation rules) before choosing a firm. Some traders pass with a news-based strategy only to find out they can't replicate it when funded. Always verify at our Hidden Rules database.
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