News Trading
A trading approach that takes positions around major economic news events — restricted, banned, or fully allowed depending on the prop firm.
What is News Trading?
News trading is the strategy of taking positions specifically around scheduled high-impact economic news releases — Fed rate decisions, Non-Farm Payrolls, CPI inflation prints, ECB announcements, etc. These releases produce massive short-term volatility (10-50 ticks in 30 seconds is common) and create high-reward/high-risk trading opportunities.
From a prop firm’s perspective, news trading is structurally risky because:
- Slippage is extreme during news events (2-5 ticks of slippage per fill is common)
- Stops can blow through wildly during the initial reaction
- Sim accounts may not accurately reflect real-market liquidity, creating sim-vs-live discrepancies
- Win/loss outcomes are partially random (driven by news content, not strategy)
This is why firms have a wide range of policies. Some ban it outright. Some allow it freely. Some restrict it to specific news events with timing windows.
How News Trading works
Common news rule structures:
- Open ban: No positions held within X minutes before/after specified events. Violation voids the trade or closes the account.
- Position size cap: Allowed but with reduced contract size during news windows.
- Full allow: No restrictions, news trading permitted as part of normal strategy.
Common restricted events on firms that have rules:
- FOMC announcements (Wednesday 2:00 PM ET, 8 times per year)
- Non-Farm Payrolls (first Friday of month, 8:30 AM ET)
- CPI Inflation reports (monthly, 8:30 AM ET)
- ECB rate decisions (monthly, 8:15 AM ET)
- BOE rate decisions (monthly, 7:00 AM ET)
- BOJ decisions, Reserve Bank announcements (varies)
Typical restriction windows: 2-5 minutes before to 2-5 minutes after the release. Some firms widen to 15 minutes pre/post on FOMC days specifically.
Detection mechanism: The firm’s risk system monitors trade timestamps against the news event calendar. A position open at 8:29:45 AM on the first Friday with NFP at 8:30 AM is an automatic violation regardless of whether you held into the release.
What “voiding” means: The firm reverses the P&L from the violating trade as if it never happened. Profit is removed from your balance. Losses… depending on firm, may still count toward drawdown calculation but be removed from balance, leaving you exposed but unrewarded. Read each firm’s specific voiding policy.
Worked example
FOMC trade on a firm with news restrictions (Topstep style, 2-min window):
- 2:00 PM ET Wednesday: FOMC rate decision releases. Powell statement begins.
- Trader has been long ES from 1:45 PM, 2 contracts at 4500. Stop at 4495.
- Restriction window: 1:58 PM to 2:02 PM ET. Position held BEFORE the window started, but if it crosses 2:00 PM, the trade enters the restricted period.
- 2:01 PM: Position held through release. Rule violation flagged in real time.
- 2:02 PM: Powell signals dovishness, ES rallies to 4510. Trader’s unrealized: +$500.
- 2:05 PM: Trader closes position at 4510, +$500 realized.
- Firm action: Violation flagged. P&L voided — $500 removed from balance. Account back to pre-trade balance. Email warning issued. First offense = warning only on most firms.
Same trade on a permissive firm (Apex, Lucid, Tradeify):
- Trader keeps the +$500. No violation. Account continues normally.
News Trading vs related concepts
Side-by-side comparison of News Trading against the most commonly confused alternatives.
| Concept | Definition | Category |
|---|---|---|
| News Trading this term | A trading approach that takes positions around major economic news events — restricted, banned, or fully allowed depending on the prop firm. | Rules & Risk |
| Rule Breach | Any violation of a prop firm's trading rules — some breaches are warnings, others permanently end the account. | Rules & Risk |
| Automated Trading | Trading executed by computer algorithms rather than manual orders — explicitly allowed at some prop firms (Lucid, Tradeify) and restricted at others. | Strategies |
| Copy Trading | A trading approach where one source account's trades are automatically replicated across multiple destination accounts — heavily restricted at most prop firms. | Rules & Risk |
| Martingale | A strategy that doubles position size after each loss to recover prior losses with a single win — universally banned or heavily restricted at prop firms due to catastrophic risk. | Strategies |
How major prop firms handle News Trading
Every firm implements news trading differently. Here's the firm-by-firm breakdown — DGT-trusted firms surface first, with implementation notes for each.
| Firm | How they handle it | Rating |
|---|---|---|
| Apex Trader Funding DGT TRUSTED | News trading is ALLOWED on most Apex products. No specific time-window restrictions on FOMC, NFP, or CPI. Trade size limits and drawdown rules still apply normally during news events. Apex is one of the most permissive firms on news trading. | |
| Take Profit Trader DGT TRUSTED | TEST phase: news trading ALLOWED with no restrictions. PRO phase: news trading RESTRICTED with active windows around FOMC, NFP, CPI. PRO+ phase: restrictions ease. The phase-by-phase change catches many traders who pass Test trading news, then violate on PRO. | |
| Tradeify DGT TRUSTED | News trading allowed on most Tradeify products. Verify per-product on tradeify.co — Lightning Funded products may have stricter policies than Growth or Select. | |
| Lucid Trading DGT TRUSTED | News trading explicitly permitted on Lucid funded products. Lucid markets itself as a "trade however you want" firm with minimal restriction overlay — news trading is part of that positioning. | |
| FundedNext DGT TRUSTED | News trading policy varies on the futures vertical. Check fundednext.com for specific policy on your account product. |
Why traders fail News Trading
Not checking your firm’s news policy before trading. Apex allows news trading. Tradeify allows news trading. TPT allows during Test phase, restricts during PRO. The same FOMC trade is fine at one firm, voided at another. Always verify.
Forgetting the time window covers BEFORE the release. If the rule is “no positions 2 minutes before to 2 minutes after,” opening a position at 1:59:30 PM the day of FOMC is a violation even if you close before 2:00 PM. The window includes the buildup, not just the reaction.
Holding through a release “by accident.” A trader who placed a swing trade Tuesday and forgot Wednesday’s FOMC may hold into the release without intent. Most firms still treat this as a violation regardless of intent. Check the calendar before holding overnight or multi-day positions.
Treating the news rule as a soft optional thing. Even firms that allow news trading have explicit position size caps or other rules. “Allowed” rarely means “unrestricted” — read the specific allowance language.
Frequently asked questions about News Trading
Which prop firms allow news trading?
Apex, Tradeify, Lucid, and TPT (Test phase) explicitly allow news trading. TPT (PRO phase), Topstep, and FundedNext typically have restrictions. Verify on the firm's rule documentation — policies change.
What counts as "news" for prop firm rule purposes?
Typically high-impact scheduled economic releases: FOMC, NFP, CPI, ECB, BOE, retail sales, GDP. Lower-impact news (regional Fed surveys, industry-specific data) usually isn't restricted. Each firm publishes its specific event list.
What happens if I trade news on a firm that restricts it?
Most firms void the trade — P&L is removed from your balance as if the trade never happened. First offense is usually a warning. Repeated violations escalate to account closure. Some firms close the account on first violation if the trade was particularly egregious.
Can I HOLD positions through news on restricted firms?
No — the restriction usually applies to "having any open position during the window," not just opening trades during the window. If you hold a swing trade overnight and there's a CPI release the next morning, you must close before the window starts.
Why do some firms restrict news trading?
Slippage during news is extreme — stops blow through wildly, sim-vs-live execution differences amplify, and the firm's risk model can't accurately price the risk. Restrictions protect both trader and firm from outsized variance during these events.