News Trading at Prop Firms: Permission, Pitfalls & Profit Potential
If your edge relies on volatility spikes around major news events, the question isn't just "can you trade news on prop firms?"—it's where, under what rules, and at what risk. The answer is nuanced: some firms welcome news traders, some ban it outright, and others sit somewhere in between with hidden limitations.
Why Do Prop Firms Restrict News Trading?
Prop firms are exposed to significant risk if traders exploit latency or slippage around news. Sharp price moves can trigger cascading losses, especially if many traders pile in. Some firms ban news trading to protect themselves from platform abuse, toxic flow, or simply to keep their risk predictable. Others allow it, but often with nuanced restrictions buried in the fine print.
Which Prop Firms Allow News Trading?
| Firm | News Trading | Drawdown (Max/Daily) | Profit Target | Profit Split | Account Sizes | Key Caveats |
|---|---|---|---|---|---|---|
| FTMO | Yes* | 10% / 5% | 10% | 80/20 → 90/10 | $10K–$200K | No swing trading during news |
| E8 Markets | Yes | 8% / 5% | 8% | 80/20 | $5K–$250K | No weekend holding |
| FundedNext | Yes | 10% / 5% | 10% | 80/20 → 90/10 | $6K–$200K | Challenge profit share conditions |
| MyFundedFX | Yes | 8% / 5% | 8% | 80/20 → 92.75% | $5K–$300K | Rules vary by plan |
| Goat Funded Trader | Yes | 6% / 4% | 10% | 80/20 → 95% | $5K–$200K | Grid/martingale prohibited |
| City Traders Imperium | Yes | 10% / 5% | 10% | 80/20 → 100% | $2.5K–$100K | EA ownership proof may be required |
| Funded Trading Plus | Yes | 6% / 4% | 10% | 80/20 → 100% | $5K–$200K | Hedging/grid prohibited |
| Apex Trader Funding | Yes (Futures) | 6% / 0% | 6% | 100% → 90/10 | $25K–$300K | Trailing drawdown |
| TopStep | Yes (Futures) | 4% / 2% | 6% | 90/10 | $50K–$150K | 50% consistency rule |
| Tradeify | Yes (Futures) | 4% / 2.5% | 6% | 90/10 | $50K–$150K | Consistency rule on most accounts |
| Take Profit Trader | Yes* (Futures) | 4% / 2.2% | 6% | 80/20 → 90/10 | $25K–$150K | No news trading on funded accounts |
*FTMO and Take Profit Trader allow news trading during evaluation, but restrict it (or aspects of it) on funded accounts. Always check latest rules before trading news.
Firms That Ban News Trading
- The5ers: News trading strictly prohibited. 6% max/3% daily drawdown. Forex/metals/indices only. Unlimited trading period, but no EAs or news trading allowed.
- Blue Guardian: No news trading on funded accounts. 6% max/4% daily drawdown, 85/15 profit split. Overnight/weekend holding allowed, but news trading is a dealbreaker for many strategies.
- My Funded Futures: No trading during Tier 1 economic news releases. 4% max drawdown, futures only, unlimited trading period.
- Lux Trading Firm: News trading not allowed. 6% static drawdown, 1:10 leverage, profit split 80/20.
What Counts as "News Trading"? Where Rules Get Tricky
Prop firms define "news trading" in several ways, and the enforcement can be ambiguous. Key variables include:
- Holding trades through scheduled news (e.g. NFP, FOMC, CPI)
- Opening new trades within X minutes of news (often 2–5 min before/after)
- Using EAs or algorithms that exploit news slippage
- Trading assets directly affected by the news (e.g. USD pairs during NFP, gold during CPI)
For example, FTMO allows news trading, but prohibits opening or holding swing trades during major news releases. Blue Guardian bans all news trading on funded accounts. My Funded Futures restricts trading during Tier 1 economic releases (think: NFP, FOMC, ECB, BOE).
Hidden Risks of News Trading at Prop Firms
Even if news trading is technically "allowed," there are practical risks that can wipe you out or get your account flagged. Here are the main ones:
- Slippage and platform freezes: During high-impact news, spreads can widen by 10x, stops get slipped, and platforms may freeze. For instance, a 5% daily drawdown on a $50K FTMO account ($2,500) can be breached in a single spike—even with a stop in place.
- Retroactive rule enforcement: If your news trading causes excessive slippage or is deemed "toxic flow," some firms may retroactively void your profits or even terminate your account—especially if their liquidity provider complains.
- Risk of instant drawdown breach: On firms with tight limits (e.g. The5ers, 6% max/3% daily), even a single whipsaw can end your challenge.
- Algorithmic detection: Many firms run automated checks for patterns typical of news scalping (e.g. sub-1 minute trades, massive position sizing during news). Even if you "pass" the rules, you may still get flagged.
Comparing News Trading Rules: Top Firms Side-by-Side
| Firm | News Trading | Hidden Restrictions | Drawdown Risk | Profit Split | Instruments |
|---|---|---|---|---|---|
| FTMO | Yes (but no swing trades during news) | News list changes regularly; ask for updates | 10% max / 5% daily | 80/20 → 90/10 | Forex, Indices, Crypto, Stocks, Commodities |
| MyFundedFX | Yes | Rules vary by challenge type | 8% max / 5% daily | 80/20 → 92.75% | Forex, Indices, Crypto, Commodities |
| FundedNext | Yes | Profit share during challenge has conditions | 10% max / 5% daily | 80/20 → 90/10 | Forex, Indices, Crypto, Commodities |
| Apex Trader Funding | Yes (Futures) | Trailing drawdown can trigger on spikes | 6% max / no daily | 100% → 90/10 | Futures only |
| Tradeify | Yes (Futures) | Consistency rule on most accounts | 4% max / 2.5% daily | 90/10 | Futures only |
| Blue Guardian | No | Guardian Shield closes trades at 1-2% loss | 6% max / 4% daily | 85/15 → 90/10 | Forex, Crypto, Indices, Commodities |
| Lux Trading Firm | No | Mandatory stop-loss, strict risk rules | 6% static / no daily | 80/20 | Forex, Indices, Commodities, Metals |
Non-Obvious Trade-Offs: What the Sales Pages Won't Tell You
- Profit splits don't matter if your account is flagged. An advertised 90/10 split (FTMO, FundedNext) is worthless if your profits are denied for "toxic flow" after news trading.
- Drawdown traps are real. News whipsaws can move 100+ pips in seconds. On an 8% max drawdown (E8 Markets, MyFundedFX), a single bad NFP can burn your challenge or funded account instantly.
- Scaling plans may restrict tactics. FTMO lets you scale to $2M, but bans swing trading through news. If your edge is multi-day news plays, you can hit a ceiling.
- Some "unlimited" trading periods are illusory. If you get flagged for news trading style, you may find your account quietly closed—regardless of period or profit.
- Futures vs. Forex firms diverge sharply. Futures firms (Apex, TopStep, Tradeify) often allow news trading but have trailing drawdowns or no daily loss limit—meaning your account can evaporate in one news candle.
How to Safely Trade News at Prop Firms
- Know the exact news windows. FTMO, for example, lists restricted events and timeframes. Violating these—even by seconds—can void your profits.
- Size down before high-impact events. If your max daily drawdown is 5%, use the PropSurvivalEngine calculator to ensure your worst-case loss on a spike won't breach your limits.
- Use hard stops—but expect slippage. News spikes can slip stops by 10–100 pips. Plan for this in your risk model, not just your order entry.
- Document everything. If a payout is denied, you'll need timestamps and trade logs to appeal—though success is rare if the firm suspects "toxic flow."
- Clarify with support—in writing. Before trading news, email support and ask for their latest news trading policy, including any upcoming changes. Save the response.
Best Prop Firms for News Traders: Our Data-Driven Picks
Based on current rules, trader reviews, and risk metrics, here are the top picks for news traders:
- MyFundedFX: Allows news trading, up to 92.75% split, $300K accounts, unlimited period. 8% max drawdown is tight, but rules are transparent if you read each plan.
- E8 Markets: News trading allowed, 8% max drawdown, unlimited period, low challenge fees (from $48). No weekend holding is a drawback for swing traders.
- FTMO: Allows news trading with restrictions. Best for disciplined traders who avoid swing trades through news. 90/10 split after scaling, up to $2M accounts, 10% drawdown is generous. Higher challenge fees ($155–$1,080).
- FundedNext: News trading, up to 90/10 split, scaling to $4M. 10% drawdown, 5% daily. Some rules are complex; support can be slow.
- Tradeify (Futures): News trading allowed, 4% drawdown, 90/10 split, payouts in 60 minutes. For futures traders, minimal restrictions.
Firms to Avoid for News Trading
- The5ers, Blue Guardian, Lux Trading Firm, My Funded Futures: All have explicit news trading bans or severe restrictions. If news is your edge, look elsewhere.
Bottom Line: Should You Trade News on Prop Firms?
For most traders, the answer is: yes, but only if you understand the rules and the real-world risk. Many top prop firms now allow news trading in some form, but every firm has nuances—drawdown limits, hidden restrictions, and the ever-present risk of retroactive profit denial.
If your strategy depends on news volatility, prioritize firms with transparent policies (MyFundedFX, E8 Markets, FTMO), generous drawdown buffers, and clear customer support. Always test your strategy in a demo, clarify rules in writing, and use risk tools like the PropSurvivalEngine calculator to avoid surprise losses.
If you need to hold trades through news events or run high-frequency news scalping, avoid firms with ambiguous or restrictive policies—no matter how attractive the profit split or scaling plan.
For the latest prop firm health grades and risk metrics, check the PropSurvivalEngine health dashboard.