News Trading
A strategy of trading around high-impact economic news events. Many prop firms restrict or ban it due to extreme volatility and slippage risks.
What is News Trading?
News trading refers to opening or holding positions around scheduled high-impact economic data releases such as Non-Farm Payrolls (NFP), CPI, interest rate decisions (FOMC), and GDP announcements.
Why prop firms restrict it
During news events, spreads can widen dramatically and price can gap 50–100+ pips in milliseconds. This creates:
- Extreme slippage that distorts simulated vs. live execution
- Outsized P&L swings that are difficult to replicate on live accounts
- Herding behaviour that can affect firm-wide risk exposure
What the ban typically means
Firms that restrict news trading usually require you to:
- Close all positions 2–5 minutes before a high-impact event
- Not open positions until 2–5 minutes after the event
Which events count?
Typically: FOMC, NFP, CPI, PPI, GDP, central bank speeches (ECB, BOE, RBA). The firm's risk team usually maintains a live economic calendar.
How Firms Apply This Rule
FTMO allows news trading. FundedNext allows it. Funding Pips restricts it. Check each firm's rules page — policies change frequently.
Related Terms
Scalping
A trading style focused on capturing very small price movements by opening and closing positions within seconds to minutes, often involving high trade frequency.
Expert Advisor (EA)
An automated trading script (bot) running on MetaTrader 4 or 5 that executes trades based on pre-programmed rules without manual intervention.
Evaluation Phase
The trading test period(s) a trader must pass — hitting profit targets while respecting all risk rules — before receiving a live funded account.