prop firm news trading restrictions, how much do they affect you
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most prop firms have news trading restrictions - cant hold positions during high-impact news, cant open during release windows, must close before specific events. each firm has slightly different rules and 'covered' news lists.
for traders who include news catalysts in strategy: how restrictive do you find prop firm rules in practice? do they cause you to skip otherwise profitable setups?
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the news restrictions cost me real money. my main strategy was post-news momentum (entering 30-60 mins after high impact release). most prop firms class that as 'news trading' even though the news already happened. had to either trade differently on prop or use own capital for those setups. cant work around the rules without violating them.
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+1. the prop firm news rules are written for the worst case (someone trying to game volatility around release) but punish all news-adjacent strategies. annoying for systematic news traders.
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news periods have widened spreads, increased slippage,, and extreme volatility. firms restrict to prevent: 1) accounts blowing up during news events, 2) traders gaming wider spreads against firm liquidity, 3) gambling-style binary 'news trades'. legitimate news strategies get caught in the same rules but firms prefer over-restriction to having to assess case by case.
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i adapted by trading non-restricted instruments during news windows. eurusd is covered, eurchf usually isnt. usdjpy is covered for fed releases, gbpjpy might not be. find the gaps in their coverage and trade there during news. minor inconvenience, preserves the strategy edge.
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every prop firm rule is them protecting themselves from your trading. they call it 'risk management' but its 'risk transfer back to the trader'.
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the news rules are reasonable risk management given prop firm risk profile. they fund unknown traders with significant capital. concentrating risk during high-volatility windows is a sensible restriction. annoying for legitimate strategies but understandable for firm-level risk control.
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