News Trading
Definition
News trading involves placing trades around scheduled economic releases (NFP, CPI, FOMC) to profit from high volatility. Many prop firms restrict or prohibit trading during major news events.
News trading creates extreme volatility that can cause large slippage, widened spreads, and rapid price moves in both directions. While some traders are skilled at trading news, prop firms often restrict it because the outcomes are essentially binary bets that can breach drawdown limits instantly.
FTMO restricts trading 2 minutes before and after high-impact news releases. Topstep and Apex have similar restrictions. Some firms will void trades placed during restricted periods, while others may fail your account entirely. The specific definition of 'high-impact news' and the restricted time window varies by firm.
Before trading any prop firm account, verify the news trading policy. PropJournal integrates an economic calendar and can warn you before upcoming high-impact releases, helping you close positions or avoid new entries during restricted periods.
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