Trading During High-Impact News Events: A Prop Trader's Complete Guide
Dr. Algo
Prop Mindset & Discipline Expert
A comprehensive guide to trading high-impact news events on prop firm accounts — covering which firms allow it, how to manage risk, and specific strategies for NFP, FOMC, and CPI releases.
Trading During High-Impact News Events: A Prop Trader's Complete Guide
High-impact news events — Non-Farm Payrolls (NFP), FOMC decisions, CPI releases — represent the highest volatility moments in trading calendars. They're also among the most mishandled events in funded account history. At Ask Propfirm, we've seen more accounts blown during NFP Friday than any other recurring event.
This guide covers everything prop traders need to know about news event management.
Which Firms Allow News Trading?
The most important first step is knowing your firm's policy:
| Firm | News Trading Policy | Restriction Window |
|---|---|---|
| FTMO (ftmo.com) | Restricted | 2 min before/after High-impact |
| Apex Trader Funding | Allowed | No restriction |
| Topstep (topstep.com) | Allowed with caution | No restriction |
| E8 Markets | Restricted | 2 min before/after |
| FundedNext | Restricted | 2 min before/after |
| The Funded Trader | Allowed | No restriction |
| Blue Guardian | Restricted | 5 min before/after |
| Funding Pips | Restricted | 2 min before/after |
Futures-based firms (Apex, Topstep) generally allow news trading because CME exchange trading is continuous and doesn't have broker-level restrictions. Forex-based firms (FTMO, E8, FundedNext) often restrict trading during news windows due to execution quality concerns and liquidity provider policies.
Understanding Why Firms Restrict News Trading
News restrictions exist for two reasons:
- Execution quality: During news, liquidity providers widen spreads dramatically and may requote orders — leading to unexpected fills and disputed execution
- Risk management: Large one-directional moves during news can breach drawdown limits rapidly, creating payout liability for firms
The restriction is about protecting the firm's business model as much as the trader's account.
High-Impact News Events to Track
| Event | Frequency | Impact | Key Instruments |
|---|---|---|---|
| Non-Farm Payrolls (NFP) | First Friday monthly | Extreme | EURUSD, GBPUSD, Gold, ES |
| FOMC Decision | 8x per year | Extreme | All instruments |
| CPI (Consumer Price Index) | Monthly | High | EURUSD, Gold, NQ |
| GDP (Advanced) | Quarterly | High | EURUSD, US30 |
| Retail Sales | Monthly | Moderate-High | EURUSD, GBPUSD |
| PMI (Manufacturing/Services) | Monthly | Moderate | EUR pairs, GBP pairs |
| ECB/BOE/BOJ Decisions | 8x per year | High | EUR, GBP, JPY pairs |
Economic calendars: Forexfactory.com, Investing.com, and TradingEconomics.com are the standard resources for timing.
Pre-News Strategies (Allowed at All Firms)
1. Trade Before the News — Close Before Release
If you have a strong conviction position ahead of a news event:
- Enter on technical basis 1–3 hours before the event
- Set a profit target and stop loss that close the position before the news restriction window
Example: Trade EURUSD from 8:00 AM EST, targeting a 30-pip move by 8:25 AM — before the 8:30 AM NFP window begins.
2. Straddle Setup (Allowed Where News Trading Permitted)
Place simultaneous pending orders above and below current price, expecting a large move in either direction:
- Buy stop 10 pips above current price
- Sell stop 10 pips below current price
Cancel the losing side immediately after the breakout direction is confirmed (within first 30 seconds). Only viable at firms allowing news trading (Apex, Topstep).
3. Post-News Fade (Risk-Managed)
After the initial news spike (typically 2–5 minutes), price often partially reverses. The post-spike fade — trading against the initial sharp move once momentum shows signs of exhaustion — is one of the highest-probability news strategies.
Setup: Wait for the first 5-minute candle after the news. If the move is extreme (2+ standard deviations from recent daily ranges), look for the first lower high (for sell setups) or higher low (for buy setups) to enter the fade.
Risk Management Specifically for News Trading
News events require tighter position sizing than normal:
| Normal Session | News Event Session |
|---|---|
| 1% risk per trade | 0.25–0.5% risk maximum |
| Standard lot calculation | Half or quarter-size |
| 30–50 pip stops typical | 15–25 pip stops |
| Multiple trades OK | Maximum 1 trade per event |
The higher volatility means wider price ranges, but your stop loss should not expand proportionally. Instead, reduce position size to match the tighter stop.
Managing Open Positions During Restricted News Windows
If your firm restricts news trading (FTMO, E8 Markets) and you have an open position heading into a news event:
Option 1: Close the position before the restriction window. Take the current profit or loss.
Option 2: Ensure your stop loss is set and the position can survive a 50–80 pip adverse move (scale down or set hard stop).
Option 3: Partial close — take 50% of the position off before the news window, let the remaining position ride with a stop.
Dr. Algo's Verdict
News trading in prop firm accounts is a advanced strategy that requires explicit firm permission and additional risk controls. For new funded traders, the safest approach is to be flat during all high-impact news events — trade before or after, not during. As skill and account stability develop, controlled news strategies can be added.
For firm-specific news policies and risk tools, visit [Ask Propfirm(/), review the FTMO news policy, Apex Trader Funding's open policy, and browse forex prop firms and futures prop firms.