Can You Trade News Events in Prop Firm Accounts?

Yes, but it depends on the firm's rules. Most proprietary trading firms place restrictions on news trading due to the risks involved, such as extreme market volatility, slippage, and widened spreads during major economic events. These restrictions often include blackout periods around high-impact announcements like Non-Farm Payrolls, CPI, or FOMC decisions, during which trading is prohibited or limited.

Here’s what you need to know:

• Blackout Periods: Many firms enforce no-trade windows (e.g., 2-5 minutes before and after key announcements).
• Account-Specific Rules: Some firms allow news trading in evaluation accounts but restrict it in funded accounts.
• Penalties: Violating news trading rules can lead to account termination or profit forfeiture.
• Exceptions: Certain firms offer specialized accounts or add-ons (e.g., Swing accounts) that allow trading during news events.

To trade news events successfully, you must:

• Use economic calendars to track restricted periods.
• Follow firm-specific rules to avoid penalties.
• Practice risk management by reducing position sizes and using stop-loss orders.
• Test strategies in demo accounts to prepare for live trading challenges.

Understanding and adhering to your firm's policies is critical for maintaining your account and achieving success in proprietary trading.

PROP FIRMS RULE CHANGE - No news trading

Prop Firm News Trading Policies

Prop firms enforce a variety of restrictions on news trading, and breaking these rules can result in account termination or loss of profits. Let’s break down the most common restrictions, how policies vary between firms, and some real-world examples.

Common Trading Restrictions

A key restriction many prop firms impose is the use of blackout periods - specific timeframes around major economic announcements when trading activity is strictly prohibited. During these intervals, traders aren’t allowed to open or close positions. The duration of these blackout windows can vary widely between firms.

Additionally, firms often ban strategies designed to take advantage of immediate market reactions. This includes tactics like placing straddles or strangles just before news events to capitalize on sudden price movements.

How Policies Differ Between Firms

News trading policies differ significantly. Some firms prohibit news trading entirely, whether during the evaluation phase or after traders transition to funded accounts. Others take a more tiered approach, allowing limited activity until real capital is involved.

Certain firms offer limited permissions for news trading, but these often come with conditions. Traders may need to opt for specialized account types or pay extra fees to access these features. In such cases, firms might adjust profit targets, tighten drawdown limits, or increase monitoring to manage the added risk.

Another layer of complexity arises from the distinction between evaluation and funded accounts. Firms that permit news trading during evaluation phases frequently impose stricter rules - or outright bans - once traders move to funded accounts.

Real Policy Examples

Take My Funded Futures as an example. This firm enforces strict rules against news trading strategies like straddles and strangles, as well as any attempts to disguise news-related trades. Their policy mandates that traders must avoid having any open positions or pending orders for at least two minutes before and after a data release.

For Tier 1 events - such as FOMC announcements, CPI data, or Employment Reports - Starter and Expert/Pro Sim Funded Accounts are completely restricted from trading during these times. Higher-tier accounts, however, may operate under modified rules.

Some firms use external economic calendars to set restricted periods. For instance, ForexFactory’s red folder events, which mark high-impact announcements, often serve as a benchmark. Trading is typically prohibited around these high-impact events.

At the core of these restrictions lies a commitment to risk management. The extreme volatility during major news events presents unique challenges, making it difficult for firms to replicate those market conditions effectively.

Problems with News Trading in Prop Accounts

Trading news events in proprietary (prop) accounts often comes with its own set of challenges, particularly when it comes to navigating complex rules and volatile market conditions. These hurdles can sometimes lead to accidental rule violations, even for experienced traders.

Understanding Complex Rules

Prop firms often have different policies around news trading, which can make it difficult for traders to keep up. With each firm setting its own guidelines, traders managing multiple accounts may struggle to remember the specific requirements for each one. This lack of clarity increases the risk of accidental breaches.

"Some traders reported that their lack of understanding of the prop company's terms and conditions led to unintentional rule violations. Specifically, many were unclear about the guidelines surrounding practices such as copying trades, trading during news releases, and the use of trading advisors. This confusion contributed to their unsuccessful attempts in the challenges, emphasizing the importance of clear communication and thorough understanding of the rules set by the prop firms." - Lingrid

This confusion often leads to execution issues, particularly during high-impact news events.

Execution Problems During News

News events are notorious for creating volatile market conditions. During these moments, rapid price movements can lead to slippage, where orders are executed at prices different from what traders intended. This can inadvertently result in violations of a firm's rules, even if the trader was acting in good faith.

Consequences of Rule Violations

Prop firms enforce strict penalties for rule violations during news events, and the consequences can be severe. For instance, ThinkCapital’s policy from May 2025 explicitly states that any trading activity within two minutes before or after a high-impact news event is considered a breach. Violations result in immediate account termination, forfeiture of profits, and a permanent end to the agreement.

Similarly, FunderPro’s 2025 guidelines for Daily Rewards and One Phase Funded Accounts include strict prohibitions against trading during specified news releases. Confirmed violations often lead to account termination, although less severe infractions may only result in an initial warning.

"Ignoring or misunderstanding these rules, even unintentionally, is a guaranteed path to challenge failure." - Propiy

These strict measures highlight the risks involved in news trading within prop accounts. Even minor errors can result in significant financial losses or permanent bans, making it essential for traders to fully understand and adhere to each firm's specific policies.

How to Trade News Within Firm Rules

Navigating news trading within prop firm accounts requires careful planning and adherence to firm-specific rules. This section provides strategies to help you trade news events effectively while staying compliant and managing risks.

Planning with Economic Calendars

Economic calendars are essential tools for avoiding accidental rule violations. They provide detailed schedules of upcoming economic events, helping you stay aware of trading restrictions. For instance, Top One Trader recommends using FXStreet and RebateFX to track high-impact news events, while FunderPro offers its own dedicated Economic Calendar page.

High-impact events like Federal Reserve Interest Rate Decisions, FOMC Statements, Non-Farm Payrolls, and Consumer Price Index (CPI) releases often influence all trading instruments. Firms like My Funded Futures categorize these as Tier 1 events, requiring traders to close all positions before such announcements.

Each firm sets specific restriction windows for these events. For example:

• Top One Trader prohibits trading 5 minutes before and after high-impact news in funded accounts.
• FunderPro requires positions to be closed 2 minutes before restricted events and reopened no sooner than 2 minutes after.
• My Funded Futures enforces similar rules, mandating all positions be flattened 2 minutes before Tier 1 releases and restricting new trades until 2 minutes after.

By using an economic calendar and understanding these restriction windows, you can plan your trades and avoid unnecessary risks.

Managing Risk During News Events

When trading around news events is permitted, managing risk becomes crucial. Start by reducing position sizes and using tighter stop-loss orders to protect against slippage and sudden price gaps.

As Lars from the Top One Trader Help Center explains:

By continuing to hold trades during a major news event, you acknowledge and accept the potential risks involved. These risks include slippage, market gaps, delayed executions, and increased volatility. Top One Trader is not liable for any losses incurred due to slippage caused by news events.

Using lower leverage can also help limit the impact of sudden price swings and reduce the likelihood of margin calls. Additionally, My Funded Futures advises sticking to regular trading systems during news intervals and avoiding strategies that exploit immediate reactions, such as straddles or strangles.

Testing your strategies in a safe environment before implementing them in live markets is the next step.

Practice with Simulated Accounts

Demo accounts are a great way to practice trading news events without risking real funds. Platforms like For Traders offer simulated challenges that allow you to refine your approach while adhering to firm-specific rules.

However, keep in mind that demo accounts may not fully replicate live conditions during high-impact news events. While they’re excellent for practicing timing and risk management, live markets often present additional challenges like slippage and execution delays.

Testing various scenarios - such as closing positions before restriction windows or managing trades near news events - can prepare you for real-market dynamics. Some firms also offer added flexibility. For example, FunderPro provides "Swing add-ons" that allow funded traders to hold positions during news events or over weekends, giving you more options to incorporate news trading into your strategy.

Finally, staying informed about policy updates is essential. Prop firms may revise their rules over time, so regularly reviewing official announcements and policy pages can help you avoid penalties like profit deductions, warnings, or account termination.

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News Trading Policy Comparison

FunderPro adjusts its news trading policies based on the type of account, giving traders the flexibility to choose a structure that aligns with their trading approach. During the challenge phase, FunderPro allows unrestricted news trading. However, once traders move to funded accounts, certain restrictions apply during high-impact news events.

Policy Comparison Chart

Firm	Account Type	News Trading Allowed	Restriction Window	Special Features	Penalties
FunderPro	Challenge Accounts (Daily Rewards, Classic, One Phase)	Yes	None	Unrestricted news trading	N/A
FunderPro	Standard Funded Accounts (Daily Rewards, Classic, One Phase)	Restricted	2 min before/after	Must close affected positions	Subject to penalties
FunderPro	Funded Accounts with Swing Add-on	Yes	None	Permits holding positions over weekends	N/A

This chart highlights how FunderPro customizes its policies. For challenge accounts, traders can freely participate in news trading without limitations. On the other hand, standard funded accounts enforce a 4-minute no-trade window (2 minutes before and after) during high-impact news events. For those seeking more flexibility, the Swing add-on allows traders to bypass these restrictions and maintain positions even during major announcements.

News Trading Examples

Take the Non-Farm Payroll (NFP) announcement, one of the most volatile economic events, as an example. A trader with a Classic Funded Account must respect the 4-minute restriction window around the Bureau of Labor Statistics release at 8:30 AM EST on the first Friday of the month. Ignoring this rule could lead to account suspension.

In contrast, a trader with the Swing add-on enjoys greater freedom. They can hold or open positions during the NFP announcement, leveraging market volatility without being bound by the standard blackout period. This added flexibility enables a more dynamic approach to news trading.

Best Practices for News Trading Compliance

Navigating prop firm news trading rules requires careful attention and a proactive approach. Staying compliant isn’t just about following the rules - it’s about safeguarding your trading account and ensuring long-term success. Here’s how you can stay on top of it.

Keeping Up with Policy Changes

Prop firms often update their policies, so it’s crucial to review your firm’s terms regularly - ideally, once a month. This helps you catch any changes before they impact your trading. For example, if your firm imposes restrictions around high-impact events like the monthly Non-Farm Payroll release, make a habit of marking these events on your calendar. Note the exact times and blackout periods. If your firm enforces a 4-minute restriction window, you’ll need to avoid trading from 8:28 AM to 8:32 AM EST on the release day.

To further ensure compliance, maintain a detailed journal. Record your trades, the news events affecting them, and the steps you took to stay within the rules. Include timestamps, the event details, and your actions. This documentation can be a lifesaver if you ever need to dispute a violation.

Using Technology for Compliance

Leverage the tools available on modern trading platforms to minimize the risk of mistakes during news events. For instance, enable push notifications from platforms like Investing.com or ForexFactory to get timely alerts about high-impact releases. These notifications give you a heads-up to prepare for restriction periods.

Many platforms also offer automated position management. Use conditional orders to automatically close positions ahead of news events. This feature is especially helpful when you’re juggling trades across multiple time zones, as it eliminates the risk of human error.

Another useful tool is an economic calendar widget. Keep it visible on your trading dashboard to stay informed about upcoming announcements. Professional traders often rely on dual-monitor setups, dedicating one screen to economic calendars and live news feeds. To stay ahead of major announcements, set alerts for 15 minutes, 5 minutes, and 2 minutes before the event. This layered approach gives you multiple chances to adjust your positions.

Getting Community Support

The prop trading community can be an invaluable resource for navigating the complexities of news trading rules. Joining a group like the For Traders Discord community connects you with experienced traders who share real-time insights. They often discuss policy changes even before official updates are released.

Participating in trading forums is another great way to learn. These platforms are filled with discussions about how different firms handle specific scenarios, like earnings announcements or central bank decisions. By tapping into this collective knowledge, you can avoid common mistakes and gain practical strategies.

Connecting with other traders who use the same prop firm as you can also provide a wealth of information. They can share firsthand experiences about how strictly rules are enforced and offer tips for staying compliant. Many successful traders credit their community ties for helping them navigate tricky policies.

Finally, consider attending virtual meetups and webinars focused on trading compliance. These events often feature prop firm representatives who can clarify rules and answer questions about news trading restrictions. Plus, they’re a great way to network with seasoned traders who’ve mastered compliance over the years.

Staying compliant isn’t just about following the rules - it’s about developing habits that protect your account and allow you to grow as a trader. The effort you invest in understanding and adhering to these policies will pay off in the form of consistent access to funded accounts and steady progress in your trading career.

Conclusion: Smart News Trading Decisions

Trading news events in proprietary accounts is possible if you thoroughly understand and adhere to your firm's policies. The secret to success lies in recognizing that no two firms are alike - what's acceptable in one firm's challenge account might breach the rules of another's funded account.

To thrive, successful news traders focus on mastering firm-specific rules, practicing solid risk management, and leveraging technology effectively.

Discipline is crucial when navigating news events. This means planning trades ahead of time, marking restriction periods on your calendar, and establishing clear exit strategies before market volatility hits. Ignoring news trading policies can lead to account termination, so staying compliant is non-negotiable.

As markets and trader behaviors evolve, so do proprietary trading policies. Staying informed through active community engagement, regularly reviewing firm updates, and committing to ongoing education will keep you prepared for these changes. Integrating compliance into every trading decision is not just a best practice - it’s essential.

FAQs

What risks should you consider when trading news events in a prop firm account?

Trading on a prop firm account during news events can be tricky. These moments often bring extreme volatility, slippage, and market gaps, which can quickly spiral into unexpected losses. Because of this, many proprietary trading firms enforce strict rules - like requiring traders to close out positions ahead of major news releases or restricting new trades during high-impact events.

Ignoring these risks isn’t just dangerous; it can lead to exceeding account limits, triggering drawdowns, or even facing penalties. If you’re trading during these periods, it’s essential to stick closely to your firm’s rules, avoid overleveraging, and prioritize strong risk management strategies to keep your account safe.

How can I manage risk and follow the rules when trading around news events in a prop firm account?

To handle risk and ensure compliance when trading around news events in a proprietary trading account, it's essential to stick to your firm's specific rules. Many firms mandate that traders close their positions before major news announcements and avoid trading during restricted periods, which often span a few minutes before and after these events. Make sure to review your firm's policies thoroughly to understand these requirements.

Managing risk during volatile news periods is crucial. Keep your risk per trade low - ideally no more than 1-2% of your account balance - and use proper position sizing to safeguard your capital. Diversifying your trades across different asset classes and implementing tools like stop-loss orders can further reduce potential losses. By staying disciplined and well-prepared, you can navigate these events effectively while remaining within your firm's guidelines.

How can I stay updated on news trading restrictions and avoid breaking the rules in my prop firm account?

To keep up with news trading restrictions and steer clear of accidental rule-breaking, regularly check your prop firm's official rules and guidelines. These documents typically spell out key requirements, like steering clear of trades during major news events or closing out positions ahead of scheduled announcements.

An economic calendar can be a handy tool to track significant news events and plan your trades within the allowed timeframes. It's also important to stay alert for updates or notifications from your firm, as policies can change. During volatile periods, practicing disciplined risk management is crucial - not just to safeguard your account but also to ensure you remain within the firm's compliance standards.