Overnight Holding
Trading Rules & RestrictionsKeeping 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.
Overnight holding rules primarily affect futures traders. Futures markets have a daily close and re-open, and prices can gap significantly between sessions. Firms that prohibit overnight holding want to avoid the risk of traders getting caught in an overnight gap.
TopStep and Apex require all positions to be flattened before the daily close. This means swing trading is effectively impossible -- you must be a day trader. FTMO, FundedNext, and The5%ers allow overnight holding, making them suitable for swing traders.
The practical impact is significant for trading style. If you trade forex (which operates nearly 24 hours), overnight holding restrictions are less relevant. For futures traders, being forced to close by 4:00 PM EST means missing overnight moves that could be profitable. Traders who prefer holding positions for days or weeks should choose firms that allow overnight and weekend holding.
TopStep $100K futures account: markets close at 4:00 PM CT. You have a winning NQ position at 3:55 PM. You must close it before 4:00 PM or face a rule violation. If NQ gaps up $200 overnight, you miss $4,000 in potential profit (2 contracts). On FTMO forex, you could hold EUR/USD overnight and capture the Asian session move.
Overnight Holding 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 overnight holding 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 overnight holding 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.
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.
News Trading Restriction
A 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.
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.
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.