Can You Trade News Events in Prop Firm Challenges?
Last updated: August 2026 | 9 min read
NFP is in 10 minutes. Your setup is forming. Can you trade it in your prop firm challenge? The answer depends entirely on which firm you chose — and getting it wrong can cost you the account regardless of whether the trade wins. News trading rules are one of the most inconsistently enforced areas of the prop industry, so here is the firm-by-firm breakdown of who allows it, who restricts it, and why you should usually skip it anyway.
Why News Trading Rules Exist
Prop firms restrict news trading for one reason: volatility kills accounts. During NFP, FOMC, or CPI, spreads can widen from 1 pip to 10-20 pips, slippage can turn a 50-pip stop into a 100-pip loss, and price can whipsaw 100 pips in both directions within minutes. None of that is a trader skill issue — it is a market-structure issue. The firm's drawdown system was not designed to absorb those fills, and when a trader blows through the daily loss limit on a news candle, the firm is the one writing off the capital.
This is also why rules differ between account models at the same firm. A swing account with no time limit might allow news holding, while a standard challenge account restricts it. Always read the rules for the exact model you are buying — not the firm's homepage headline.
Firms That Allow News Trading
- FundedNext — all news allowed on most models. One of the most news-friendly forex firms.
- E8 Markets — all news allowed. Combined with their 8% daily loss, this is the most forgiving news environment in forex prop.
- Lux Trading Firm — no restrictions. Professional-oriented firm that trusts its traders.
- The5ers — news trading welcomed, with some model-specific restrictions.
These firms treat news as a legitimate trading style rather than a liability. Their risk controls (generous daily loss limits, trailing drawdowns) are designed to survive the volatility instead of banning it.
Firms That Restrict or Ban News Trading
- FTMO — restricted during NFP, FOMC, and CPI on standard models. Swing accounts are more permissive.
- TopStepTrader — news violations can trigger an account reset. Futures news (CPI, FOMC, Fed speeches) is the high-risk zone.
- Earn2Trade — high-impact news banned on the Gauntlet evaluation.
- City Traders Imperium — some news restrictions apply, though EAs are allowed.
The banned/restricted list is dominated by firms with strict daily loss limits. TopStep's 2-4% daily loss on the Combine makes a CPI candle genuinely account-ending, which is why they enforce the ban hard.
News Rules Compared
| Firm | News Trading | Daily Loss Limit | Best for News Traders? |
|---|---|---|---|
| FundedNext | Allowed | 5% | Yes |
| E8 Markets | Allowed | 8% | Yes — most forgiving |
| Lux Trading Firm | Allowed | 5% | Yes |
| The5ers | Mostly allowed | 2-3% | Caution — tight daily limit |
| FTMO | Restricted (NFP/FOMC/CPI) | 5% | No |
| TopStepTrader | Restricted | 2-4% | No |
| Earn2Trade | High-impact banned | 3% | No |
Should You Trade News Even If It's Allowed?
Here is the uncomfortable truth: even when a firm allows news trading, the risk math rarely works in your favor. Three forces combine against you:
- Slippage: your stop-loss fills at a worse price than ordered. A 50-pip stop becomes a 100-pip loss on a fast move.
- Whipsaws: price spikes one way, stops everyone out, then reverses 100 pips the other way. You lose on both sides of the same news event.
- Widened spreads: 1 pip becomes 10-20 pips during the release, meaning you start every position 10-20 pips in the hole.
The few traders who profitably trade news do it with pre-planned straddles, tiny size, and years of experience reading the release. That is not a beginner strategy, and it is not a challenge-passing strategy.
How to Handle News in a Challenge: A Safe System
- Check the calendar every morning for red-folder events (NFP, FOMC, CPI, central bank decisions).
- Close or hedge existing positions 30 minutes before the release if your firm restricts news holding.
- Do not open new trades during the 30 minutes before or after the event. The setup that "looks perfect" is the one that gets stopped.
- Wait for the first 5-minute candle to close after the release before reassessing the market.
- If you must trade news, use half your normal size and only on firms that explicitly allow it (E8, FundedNext).
What About Swing Accounts and Holding Through News?
If you trade a swing model — FTMO swing accounts, for example — the news rules relax because holding positions overnight and through events is the entire point of the model. The tradeoff is usually a lower profit split or different drawdown structure. If your strategy is to hold through news, choose a firm and model that explicitly supports it rather than hoping a standard challenge account won't notice.
Verdict
The Final Verdict
If news trading is your edge, pick E8 Markets (8% daily loss + all news allowed) or FundedNext (all news allowed, unlimited time). If news trading is just a temptation, treat every red-folder event as a no-trade zone regardless of what your firm allows — the slippage and whipsaw risk destroy more challenge accounts than any single rule ever could. Know your firm's exact model rules before you buy, and when in doubt, sit on your hands for 30 minutes around the release.
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Frequently Asked Questions
Q: Do prop firms allow news trading?
A: It depends entirely on the firm. FundedNext, E8 Markets, Lux Trading Firm, and The5ers allow news trading on most account models. FTMO restricts trading during NFP, FOMC, and CPI announcements on some models, TopStepTrader can reset accounts for news violations, and Earn2Trade bans high-impact news trades.
Q: Which prop firm allows news trading?
A: FundedNext (all news allowed on most models), E8 Markets (all news allowed), Lux Trading Firm (no restrictions), and The5ers (news trading welcomed with some restrictions) are the most news-friendly firms in 2026.
Q: Can you trade NFP on FTMO?
A: FTMO restricts trading during high-impact events like NFP, FOMC, and CPI on certain account models. The safest approach is to close positions before the release and wait 30 minutes after the initial volatility spike before entering new trades.
Q: Why do prop firms restrict news trading?
A: News releases cause extreme slippage, spread widening, and whipsaw moves that can breach drawdown limits instantly. A 50-pip stop can become a 100-pip loss in seconds, and the firm gets blamed for the fill even though the trader chose to hold through the event.
Q: How do I check a prop firm's news trading rules?
A: Read the trading rules or FAQ section on the firm's website before purchasing, and check the specific account model you plan to buy — rules often differ between standard, swing, and instant funding accounts. When in doubt, assume high-impact news is off-limits.
Q: Does the news restriction apply to funded accounts too?
A: Often yes. Many firms carry the news restriction from the evaluation into the funded phase, so check the funded account rules as well. Violating a news rule on a funded account can freeze your payout as easily as it can fail a challenge.