The news trading ban is one of the most frequently violated prop firm rules — often by traders who didn't realise it applied to them, or who thought the rule only covered intentional news plays. Understanding exactly what triggers a violation, why the rule exists, and how to avoid it is essential for anyone serious about keeping their funded account.
What the Rule Actually Says
The news trading rule typically prohibits opening new positions or holding existing positions during a window around high-impact economic news events. The standard window is 2 minutes before and 2 minutes after the scheduled release time, though some firms use a 5-minute window on each side.
Critically, the rule is about the window — not about whether you intended to trade the news. If you have an open trade from two hours ago and simply forget to close it before NFP, you may still be in violation. Many traders have lost funded accounts this way.
Always check the exact wording of your firm's news trading policy. Some firms say "no trades open during news." Others say "no new trades opened within 2 minutes of news." The distinction matters — one requires you to exit before the window, the other allows you to hold but not enter.
Why Firms Have the Rule
The rule exists for several reasons, all of which relate to the firm's risk and operational exposure:
- Slippage: During high-impact events, the spread can widen from 1–2 pips to 20–50 pips in seconds. Executing at the intended price becomes impossible, and the firm may be unable to hedge the position properly.
- Liquidity risk: The market can become effectively one-sided for a moment as market makers pull their quotes. This means your stop loss may execute 30–40 pips from where you intended.
- Model exploitation: Some trading strategies are specifically designed to front-run news with very high win rates during the spike, then exit. Firms view this as exploiting their simulated pricing rather than demonstrating real trading skill.
- Asymmetric risk: Even a modest news trade that goes wrong during an extreme event can lose far more than the modelled risk — the firm bears this.
Which Events Count as High-Impact
Most prop firms define high-impact news as events that are flagged red on major economic calendars. The most commonly cited events include:
| Event | Frequency | Why It Moves Markets |
|---|---|---|
| Non-Farm Payrolls (NFP) | Monthly (first Friday) | Major US employment indicator — drives USD and equity futures |
| FOMC Interest Rate Decision | 8 times per year | Sets US interest rate expectations — moves everything |
| Consumer Price Index (CPI) | Monthly | Key inflation measure — affects rate expectations |
| GDP Release | Quarterly | Economy size/growth — affects long-term outlook and currency |
| Central Bank press conferences | After each rate decision | Chair commentary can move markets more than the decision |
| PMI / ISM data | Monthly | Manufacturing and services activity — leading economic indicators |
| Retail Sales | Monthly | Consumer spending data — USD-sensitive |
| Unemployment Claims | Weekly | Labour market health — less dramatic but still high-impact |
Which Firms Enforce It — and How Strictly
FTMO explicitly bans news trading across all their accounts. Their terms flag it as a prohibited strategy and accounts can be terminated for repeated violations, even if the trades were profitable. FTMO's stance is that profiting from news spikes on their platform does not reflect the kind of discretionary trading they are evaluating.
Apex Trader Funding is generally more lenient on news trading, particularly for futures. Exchange-traded futures have transparent pricing and genuine liquidity even during news events, which reduces the exploitation risk. Apex does not maintain an explicit blanket news trading ban in the same way as FTMO, but traders should always verify the current terms on their account.
TopStep and most other forex-focused firms tend to restrict news trading on their evaluation accounts. The specific rules vary, so check the firm's help documentation or contact support before trading through a news event.
How to Check the Economic Calendar
Build a habit of checking the calendar before every trading session. The most widely used economic calendars are:
- Forex Factory — colour-coded by impact level, shows previous, forecast, and actual figures with countdown timers.
- Investing.com economic calendar — broad coverage across multiple currencies and countries.
- Trading Economics — good for macro data with historical charts.
- The Economic Calendar tool on this site — filtered for high-impact events relevant to prop traders.
Filter the calendar to show only red (high-impact) events and check it at the start of each session. Add the major events to your phone calendar with a 10-minute reminder so you are never caught with an open position by accident.
Consequences of Violating the Rule
Consequences range from a warning on first offence to immediate account termination, depending on the firm and how many violations have occurred. Critically, profits made on news trades can be clawed back even if the trade was profitable. Some firms will void the entire challenge attempt if a news violation is detected, even if you were otherwise on track to pass.
The safest approach: treat the news window as a hard stop. Close your positions at least 5 minutes before the release. Come back 5 minutes after. The opportunity cost of missing a few minutes of trading is far lower than the cost of having your account terminated or profits voided.
Tools to Help
- Economic Calendar — check today's high-impact events before every session.
- Max Daily Loss Calculator — know exactly how much buffer you have before the news window so you can size down or exit with confidence.