News Trading Restriction
Trading Rules & RestrictionsA rule prohibiting or limiting trading during major economic announcements like FOMC, NFP, and CPI releases. Firms restrict news trading because extreme volatility can cause rapid drawdown breaches.
News trading restrictions vary significantly across firms. Some firms forbid opening or closing positions within a window around major news events (typically 2-5 minutes before and after). Others allow news trading during evaluation but restrict it on funded accounts.
FTMO restricts news trading on funded accounts only -- you cannot open new positions 2 minutes before or after high-impact events. During evaluation, news trading is fully allowed. Apex restricts news trading in both evaluation and funded phases. The5%ers and FundedNext allow news trading without restrictions.
The restricted events typically include FOMC interest rate decisions, Non-Farm Payrolls (NFP), CPI reports, and GDP releases. Some firms publish a calendar of restricted events. Violations are usually detected automatically and result in profit from those trades being removed or the account being terminated.
FTMO funded account, NFP release at 8:30 AM EST: you cannot open or close positions between 8:28 AM and 8:32 AM. If you hold a position through the window, that is allowed -- the restriction is on new orders. Apex is stricter: no positions can be open during FOMC/NFP/CPI. If you hold a position into the restricted window, profits may be reversed.
News Trading Restriction directly affects whether you pass or fail a prop firm evaluation. Unlike trading your own account where you can recover from mistakes over time, prop firm rules create hard boundaries -- violate them once and you lose your challenge fee and have to start over. Trading rules vary significantly between firms and can catch traders off guard. What is allowed at one firm may be a violation at another. Always verify news trading restriction rules before placing your first trade on a new account.
Practical example across firms: FTMO and TopStep handle this differently. FTMO is a 2-step firm with static drawdown and a 5% daily loss limit, starting from €155. TopStep is a 1-step firm with trailing drawdown and a 2% daily loss limit, starting from $49. These structural differences mean your approach to news trading restriction must adapt to whichever firm you choose.
Common mistake: Traders often carry over habits from one firm to another without checking the rules. News trading, overnight holding, weekend positions, and EA usage all vary by firm and sometimes by evaluation phase. Always verify before your first trade.
Overnight Holding
Keeping trading positions open past the daily market close. Some prop firms require all positions to be flat (closed) before the end of the trading session, while others allow positions to be held overnight.
Weekend Holding
Keeping trading positions open from Friday market close through Monday market open. Weekend holding carries gap risk because markets can move significantly over the weekend due to geopolitical events.
Daily Loss Limit
The maximum amount you can lose in a single trading day before your account is flagged or terminated. This resets each day and is separate from your overall maximum drawdown.
Position Sizing
The process of determining how many contracts, lots, or shares to trade per position based on your account size, risk tolerance, and the distance to your stop-loss. Proper position sizing is the foundation of risk management.