• High-impact news events (Red Folders) typically trigger a 4-minute restricted window (2 minutes before and 2 minutes after the release).
• Trading during restricted windows can lead to a Prohibited Strategies violation, resulting in the forfeiture of all profits made during that period.
• Firms like Maven Trading and FXIFY have specific, contrasting policies regarding whether news trading is allowed during the evaluation phase versus the funded phase.
• Strategies such as "news straddling" (placing dual pending orders) are almost universally banned due to simulated environment slippage issues.
• Compliance is tracked via precise server timestamps; even a trade closed one second into a restricted window can trigger a breach.

*Note: FTMO allows news trading on "Swing" accounts but restricts it on "Standard" funded accounts.

In the context of a Prop Firm, "high-impact news" is not a subjective term. Most firms synchronize their compliance engines with economic calendars like Forex Factory or market reporting. Events marked as "Red Folders" or "High Impact" are the primary triggers for restrictions.

Identifying Restricted Events

Firms typically target events that induce extreme volatility and high impact news spread expansion. These include:

Traders should use a Risk Profile Matcher to determine if their strategy relies on these volatile periods. If your strategy requires Fundamental Analysis during these times, you must select a firm that permits news execution.

The "2-minute rule" is the industry standard for news-restricted accounts. This rule dictates that no new trades can be opened, and no existing trades can be closed, within a window starting 120 seconds before the data release and ending 120 seconds after.

Why the 4-Minute Gap Exists

Prop firms operate on simulated feeds. During high-impact news, the underlying liquidity providers experience "gapping" and "slippage." In a Paper Trading environment, the execution of a trade might not accurately reflect the massive spread expansion occurring in the live interbank market. To prevent traders from taking advantage of these simulation inaccuracies, firms enforce this buffer.

Impact on Day Trading

For those focused on Day Trading, this rule effectively shuts down the market for 4 minutes. If you are holding a position into the news, you must either close it before the 2nd minute prior to the release or hold it until 2 minutes after.

The consequences of violating news rules vary significantly between firms. Understanding these can be the difference between a minor setback and losing your entire Funded Account.

Soft Breach: Profit Deduction

Firms like FTMO often treat a news violation as a "soft breach." In this scenario, if you execute a trade during the restricted window and make a profit, that profit is removed from your balance. The account remains active, but you lose the gains. Conversely, if the trade resulted in a loss, the loss usually stands.

Hard Breach: Account Termination

Some stricter firms classify news trading as a violation of their Prohibited Strategies policy. This results in the immediate termination of the account. Traders can use a Challenge Cost Comparison tool to see if the risk of a hard breach justifies the lower entry fee of a restricted firm.

When comparing Maven Trading and FXIFY, the approach to news is a primary differentiator for aggressive traders.

Maven Trading News Rules

Maven Trading generally allows news trading during the evaluation phases. However, once a trader reaches the funded stage, restrictions apply to specific high-impact events. They utilize a strictly monitored calendar, and violations can lead to account warnings. Their Max Daily Drawdown is 4%, leaving little room for the volatility inherent in news events.

FXIFY News Trading Policy

FXIFY offers more flexibility. Many of their account types allow for news trading without specific window restrictions, making them a preferred choice for traders who utilize news straddle vs news fade strategies. With an 80%-100% Profit Split, FXIFY appeals to those who can manage the risks of nfp slippage management prop firm.

Even if a firm allows news trading, you must account for the technical realities of the market. During NFP or CPI, spreads can widen from 0.1 pips to 20+ pips instantaneously.

The Reality of Slippage

In a live market, your stop loss might be "gapped" over. Prop firms simulate this by applying slippage algorithms. If you are using a Position Size Calculator, you must factor in a wider-than-normal exit price to avoid hitting your Max Total Drawdown.

Step 1: Check the Economic Calendar

Before the trading week begins, identify all "Red Folder" events. Use the [PropFirmScan News Calendar] to sync these with your specific firm's time zone (usually GMT+2 or GMT+3).

Step 2: Calculate Potential Drawdown

Use a Drawdown Calculator to simulate a "worst-case" slippage scenario. If a 10-pip slippage would cause you to exceed your Max Daily Drawdown, reduce your Position Sizing.

Step 3: Set Alerts

Set alerts for 5 minutes before the restricted window. This gives you a 3-minute buffer to close positions manually before the 2-minute "no-trade" zone begins.

Step 4: Post-News Verification

After the news release, wait for the full 2 minutes to pass. Before entering a new trade, check the current spread on your MT5 or cTrader terminal to ensure it has returned to "normal" levels.

A common strategy known as a "news straddle" involves placing a Buy Stop and a Sell Stop just before a news release. The goal is to catch the momentum in whichever direction the market breaks.

Why Firms Ban Straddling

Most firms, including Funding Pips and The5ers, view this as an attempt to exploit the simulated environment. Because the simulation may fill both orders at the same price before the "gap" is calculated, it creates an unrealistic profit scenario that wouldn't exist in a Live Account. This is often categorized under "arbitrage" or "unrealistic trading behavior."

Directional Bias vs. News Straddle

Firms allow traders to have a directional bias. This means you can hold a single long or short position into the news (if news trading is permitted). The violation occurs when you attempt to "hedge" the news by playing both sides simultaneously, which is a flagged Hedging Strategy in many T&Cs.

If you are trading at a firm with news restrictions, like FTMO (on standard accounts), you must be wary of "News Gaps."

The Gap Rule

If a trade is opened before the restricted window but remains open through the window, it is usually fine. However, if that trade hits a Take Profit (TP) or Stop Loss (SL) inside the restricted window due to a price gap, the firm may manually adjust the profit.

For example, if the price "gaps" over your TP during NFP, the firm might only honor the price at the end of the restricted window or the TP price itself, deducting any "excess" profit gained from the gap. Use a Profit Calculator to see how these deductions might impact your Scaling Plan.

Modern prop firms use automated auditing software to scan every trade against the economic calendar.

Server Timestamp Matching

Every order (Open, Close, Modify) has a server timestamp accurate to the millisecond. Firms run scripts that cross-reference these timestamps with the exact second a news report was released (e.g., 08:30:00 EST).

Detection of "News Fading"

Firms also look for "news fading"—a strategy where a trader waits for the initial spike and then trades the reversal. While not always prohibited, doing this within the 2-minute post-release window is a common way traders accidentally trigger a breach. Check your Pass Rate Analysis to see if news-related breaches are dragging down your performance.

For traders who specialize in Fundamental Analysis, several firms offer "News-Friendly" environments.

The5ers and Funding Pips

The5ers and Funding Pips are widely recognized for their relaxed news policies. Funding Pips offers a Profit Split of up to 100% and does not enforce a restricted window, though they warn about the risks of slippage.

FXIFY and Alpha Capital Group

FXIFY allows news trading on their accounts, provided it doesn't cross into "gambling" behavior (e.g., risking 100% of the daily drawdown on a single NFP candle). Alpha Capital Group also maintains a 5% Max Daily Drawdown and generally permits news execution, making them a top choice for volatility traders.

Comparison of News-Friendly Firms

Can I trade the news during the evaluation phase?

Most firms, including FTMO and Maven Trading, allow news trading during the Evaluation (Phase 1 and 2). Restrictions typically only apply once you are on a Funded Account. This is because the firm is taking real financial risk on a funded account, whereas the evaluation is purely a simulation of skill.

What is the 2-minute rule in prop firms?

The 2-minute rule prohibits opening or closing any positions 2 minutes before and 2 minutes after a high-impact news event. This creates a 4-minute "dead zone" designed to protect the firm from the inaccuracies of simulated price feeds during extreme volatility.

Does NFP count as high-impact news?

Yes, Non-Farm Payrolls (NFP) is considered the highest-impact event in the forex market. Almost every prop firm with news restrictions will include NFP in their prohibited window. Traders should use Position Sizing carefully during this time due to nfp slippage management prop firm protocols.

What happens if my stop loss is hit during news?

If you are at a firm with news restrictions and your SL is hit during the restricted window, the trade is usually considered a "soft breach." The loss will be realized, but your account won't be closed. However, if the firm identifies it as an intentional violation of their Prohibited Strategies, they could terminate the account.

Are pending orders allowed during news?

Pending orders (Buy Limits, Sell Stops, etc.) that are triggered during the restricted window are treated the same as market orders. If they execute within the 2 minutes before or after news, they are a violation. Furthermore, "straddling" (placing both a buy and sell stop) is often a hard breach.

Which prop firms have no news trading rules?

Firms like The5ers, Funding Pips, and FXIFY are known for having no or very few restrictions on news trading. These firms are ideal for traders who incorporate high-volatility events into their strategy. Always check the latest Trading Rules Comparison for updates.