Prop Firm News Trading Rules: What You Can and Cannot Do During News
News restrictions are the rules tracers break by accident most often, because they depend on knowing the time rather than on making a decision. The short version: many firms allow news trading during the evaluation but restrict it on funded accounts, several require positions flat for a defined window around high-impact events, and a few restrict only the opening of new positions rather than the holding of existing ones.
Do prop firms allow news trading?
It depends entirely on the firm, and the answer frequently differs between evaluation and funded accounts at the same firm. The four patterns you will encounter:
| Pattern | What it means | Typical wording |
|---|---|---|
| Unrestricted | Trade and hold through anything | "News trading is permitted." |
| Flatten before the event | No position may be open inside a window around the release | "Positions must be closed two minutes before T1 news." |
| No new positions | Existing positions may be held; opening inside the window is prohibited | "No trades may be opened within X minutes of a high-impact release." |
| Profit exclusion | You may trade, but profit made inside the window does not count toward the target or payout | "Profits from restricted news windows are not counted." |
Notice that only one of those four actually fails the account. The others range from a mild handicap to a pure accounting rule, and distinguishing them changes how much the rule should affect your strategy.
Automated strategies are where this rule bites hardest, because a bot with no news-window logic will eventually open inside a restricted release — and an accidental breach fails the account exactly as a deliberate one would. See EA and copy trading rules.
What is the two-minute rule?
The most common formulation is a flat-position window. You will see it written as something like "all positions must be flattened at least two minutes before the scheduled release", which produces two deadlines — one before the event and one after, often a further minute or two.
Mechanically that means: close by T−2 minutes, stay flat through the release, and only then consider re-entering. The window is deliberately short enough to be tradeable around and long enough that the firm is not exposed to the spike.
The reason for the window is the same as the reason for weekend rules: a scheduled release can produce a gap through your stop, breach a hard drawdown limit instantly, and leave the firm with a loss no stop could have controlled. The firm is not trying to stop you profiting; it is trying to stop an uncontrollable loss. That mechanic is identical to the one in weekend holding rules, just on a smaller timescale.
Which events are usually restricted?
Firms generally define a category rather than a list. The usual candidates:
- Central bank rate decisions and statements — FOMC, ECB, BoE, BoJ, and the accompanying press conferences.
- Employment data — US non-farm payrolls is the classic "red" event, plus unemployment and jobless claims at a lesser tier.
- Inflation prints — CPI and PPI, particularly the US releases.
- GDP releases and major revisions.
- Anything the firm's own calendar flags as high impact. Some firms publish a tier system (T1/T2/T3) and restrict only T1; others restrict everything red.
The trap is the tier system. If a firm restricts only T1 and you are watching a generic calendar that flags everything red, you will either over-restrict yourself or misjudge one release. Use the firm's own calendar if it publishes one.
Scheduled versus unscheduled news
Rules almost always govern scheduled events with a published time. Unscheduled news — a surprise resignation, an intervention, a geopolitical shock — is not covered, and it can produce exactly the gap the rule was designed to avoid. That risk cannot be eliminated by a rule; it can only be reduced by position size.
News trading on a funded account
This is where the rules most often tighten. Firms that allow free news trading during an evaluation sometimes restrict it once you are funded, on the logic that evaluation failures cost them nothing whereas funded payouts cost real money.
Three things to check the day you get funded, not the day you breach:
- Did the news rule change? Re-read the funded-account terms; they are a different document from the evaluation terms at most firms.
- Is there a payout exclusion? Some firms let you trade news but exclude the profit from a payout calculation, which quietly reduces what you can withdraw.
- Is there a per-event trade cap? A minority restrict the number of trades inside a window, not just holding.
How to trade around news without breaking the rule
- Build a pre-session check into your routine. Before the first trade of the day, look at the calendar for the session's scheduled events.
- Mark the blackout window on your chart. T−2 to T+2 minutes, or whatever your firm specifies. Make it mechanical; do not rely on memory at 2:29pm.
- Flatten deliberately, not at the last second. Thin liquidity in the final seconds before a release is the worst possible time to be closing size.
- Reduce size on news days regardless of the rule. If the rule allows you to hold, gap risk still applies — the rule merely means the firm tolerates it, not that it is free.
- Keep the calendar window live while trading. The most common breach is a position opened at 2:00pm not realising a release was scheduled for 2:00pm.
- Check whether the funded-account rules differ. Re-read them the day you pass, not the day you breach. The clauses worth checking first are listed in the rules checklist.
Does a news restriction shorten my available trading time?
Yes, and it interacts with the day count. If a firm restricts high-impact events and imposes a minimum trading-day requirement, weeks with heavy data calendars have fewer usable sessions — and a fixed-window evaluation loses that time permanently.
On a 30-day window with a 5-day minimum, this is rarely fatal. On a fixed window with a 10-day minimum and a restricted calendar, it is worth checking before you buy. The interaction is the same one described in minimum trading days explained.
One asset class complicates the calendar further: crypto markets never close, so the sharp moves are event-driven rather than scheduled, and a rule written around release times does not map onto them cleanly. See crypto prop firm rules.
Frequently asked questions
Can I hold a position through NFP if my stop is in place?
Only if your firm permits it. A stop does not protect you through a gap — the first available price on the reopen can be far past your level, which is precisely what the flatten rule exists to prevent. If the firm requires flat, a stop is irrelevant to compliance.
Does the rule apply to limit orders that might fill during the window?
At some firms, yes. A pending order that triggers inside a restricted window can be treated as opening a position during the window. If your firm restricts opening trades near news, cancel pending orders as well as closing positions.
How do I know which tier an event is?
Use the firm's own calendar or rule documentation. A third-party calendar's colour coding ("red/orange/yellow") does not necessarily match the firm's tier definitions.
Is news trading banned because firms are losing money?
No — it is banned because a gap is an uncontrollable loss on an account with a hard drawdown limit. A firm that honours stops normally cannot honour one through a gap, and it does not want to fund a loss it had no mechanism to manage.
Can a third party trade news for me?
Only if the firm permits third-party trading, which many explicitly prohibit. Even where it is permitted, the news and weekend restrictions are hard constraints — the same window, the same deadlines — so an arrangement that claims to trade news freely on a restricted account is claiming something the platform will not allow.
Summary
- News rules vary from unrestricted to flat-before-event to profit-excluded.
- The two-minute window is the most common formulation; deadlines apply before and after.
- Rules frequently tighten on funded accounts — re-read them the day you pass.
- Restrictions usually cover scheduled high-impact events only; unscheduled news is unhedged risk.
- A stop loss is not protection inside a news gap, whatever the rule says.