News Trading Restrictions in Prop Firms: What Traders Must Know
News trading restrictions exist because prop firms hate volatility spikes. High-impact releases move the market too fast, spreads blow out, and traders either hit jackpot or blow the account instantly. Prop firms don’t gamble with that. They block or restrict trading during major economic events, and violating those rules will kill your account immediately — even if the trade wins.
Why Prop Firms Ban News Trading
Prop firms restrict news trading for three reasons:
- Risk control — firms can’t hedge fast enough during extreme volatility
- Slippage spikes — a 1-tick stop can turn into a 20-tick fill
- Unfair advantage — gamblers betting seconds before a release
They don’t want instant lottery tickets or instant failures. They want predictable traders who follow rules.
Typical News Restrictions Across Prop Firms
Most firms use a time window before and after news events. Common restrictions include:
- No opening new trades within 2 minutes before high-impact news
- No opening new trades within 2 minutes after the release
- Forced flat during certain events
- No holding positions through news (flat required before release)
Some firms block news trading automatically. Others allow it but punish you after the fact if they see it in your logs.
The Events Most Commonly Restricted
These are the events that trigger violations at nearly every prop firm:
- NFP (Non-Farm Payrolls)
- CPI
- FOMC rate decision
- FOMC press conference
- PPI
- GDP
- Unemployment rate
- ISM manufacturing/non-manufacturing
These releases move ES, NQ, YM, 6E, CL, and GC violently — and firms know it.
How News Violations Are Triggered
You violate the rule if you:
- open a trade inside the restricted window
- hold a position into a restricted release
- scale in during restricted minutes
- get filled due to a pending order during or right before news
Even limit orders sitting in the book can get you violated if they fill during a restricted release.
Do All Firms Ban News Trading?
No — some allow news trading but adjust risk systems, including:
- wider auto-liquidation buffers
- tighter trailing drawdown movement
- slippage-adjusted fills
But these firms are the minority. Most ban news trading outright.
News Trading vs Trading Halts
News trading restrictions aren’t the same as trading halt rules. Halts are market-wide circuit breakers. News restrictions are firm-specific rules added on top of normal market behavior.
How to Stay Safe During News
- Know the economic calendar every morning
- Flatten early — don’t cut it close
- Watch out for surprise releases
- Disable autoscale or bracket orders near news
If you’re not sure, stay flat. The firm will not care that “you didn’t know.” They will violate you anyway.
Final Takeaway
News restrictions exist to stop traders from gambling during volatility spikes. Learn the calendar, know the rules, and never hold positions anywhere near restricted events. Prop firms don’t negotiate news violations — they just shut your account down.