Trading the News at a Prop Firm: Rules, Risks and a Safe Plan

Key takeaways

• News rules vary widely between prop firms; Clarity Traders allows trading during high-impact news.
• Spreads widen and slippage rises around big releases, so a stop-loss is not a guaranteed exit price.
• Cut position size around news so a gap through your stop cannot threaten a loss limit.
• One big news day can also make the consistency rule harder to meet on a funded account.

High-impact news releases move markets faster than almost anything else. For prop traders that creates opportunity and danger in equal measure. Some firms ban trading around news entirely; others allow it with no restrictions. This guide explains how news rules differ, what actually happens to prices during a release, and how to trade news without putting your account at risk.

How prop firm news rules differ

• No restriction: you can open, hold and close trades through any release.
• Window ban: no opening or closing trades for a few minutes before and after selected releases, often only on funded accounts.
• Profit exclusion: trades during the window are allowed, but profits from them may not count toward a payout.
• Account-type rules: some firms allow news on evaluation accounts but restrict it on funded ones, or the reverse.

At Clarity Traders, trading during high-impact news is allowed on Instant, One Step and Two Step accounts. If you trade at more than one firm, check each set of rules separately.

What happens to prices during a release

Spreads widen

In the seconds around a major release, liquidity providers pull back and spreads can widen sharply. A pair that normally trades at a fraction of a pip can briefly cost several pips to enter or exit. You can see typical conditions on Clarity’s Live Spreads page.

Slippage increases

Orders may be filled at a worse price than requested, including stop-loss orders. A 20-pip stop can become a 35-pip loss if price gaps through it.

Direction can flip

The first move after a release is often reversed within minutes as the market digests the detail. Chasing the first candle is one of the most common ways to lose money on news.

The releases that move markets most

• US jobs report (non-farm payrolls) and unemployment rate.
• Inflation data such as CPI in the US, UK and eurozone.
• Central bank rate decisions and press conferences, including the Federal Reserve, ECB and Bank of England.
• GDP and retail sales for major economies.

Check an economic calendar every morning and mark high-impact events for the instruments you trade.

Trade the session and the strategy that suit you, with news trading allowed.
See Two Step rules →

A safe plan for trading news on a funded account

1. Decide in advance whether you will trade the release, stay flat, or keep existing positions with reduced size.
2. Halve your normal risk for any trade open during the release. If you usually risk 0.5%, use 0.25%.
3. Assume your stop could slip. Size so that even a loss of double your stop distance stays well inside your daily limit.
4. Avoid the first minute. Many traders wait for the initial spike to settle and for spreads to normalise.
5. Close or tighten existing trades before the release if a gap could push you through a limit.
6. Log news trades separately in your journal to see whether they actually help your results.

Worked example

You trade a $50,000 Two Step account with a 5% daily loss limit ($2,500). Normally you risk 0.5% ($250) with a 20-pip stop on EUR/USD, which is 1.25 lots. Before the US jobs report you cut risk to 0.25% ($125), or about 0.6 lots. If the release gaps price 40 pips through your stop, your loss is around $250 instead of $500. Either way it is a small dent, not a threat to the daily limit.

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News and the consistency rule

A big winning news trade can feel like a gift, but on a funded account it can make the consistency rule harder to meet. If one release produces most of your profit for the cycle, you may need to keep trading before you can request a payout. Read The Prop Firm Consistency Rule Explained for how to plan around it.

Should beginners trade the news?

Usually not at first. News trading needs fast decisions, careful sizing and acceptance of slippage. Most beginners do better learning one calm session first; see the best prop trading strategies for beginners. Being allowed to trade the news does not mean you have to.

News trading allowed, no minimum trading days, no time limit.
Explore Funded Trading Accounts →

Frequently asked questions

Can I trade the news at Clarity Traders?

Yes. Trading during high-impact news is allowed on all Clarity account types. You are responsible for the extra volatility and slippage.

Will my stop-loss protect me during news?

It limits your loss in most conditions, but in fast markets it can be filled at a worse price. Size positions with that possibility in mind.

Is news trading the same as high-frequency trading?

No. High-frequency and latency strategies are not allowed at Clarity, and trades must stay open at least 60 seconds. Normal discretionary or rules-based news trading is a different thing.

Which releases should I avoid?

If you are not trading the release on purpose, step aside for the biggest ones: jobs data, inflation data and central bank decisions for the currencies you trade.