Why News Events Can Make or Break Your Evaluation
For prop firm traders, economic news events can be both a blessing and a curse. Volatility spikes can lead to huge wins—or sudden violations. Whether you’re trading with Prop Shop Traders, Funded Futures Network, or Top One Futures, understanding how to navigate FOMC announcements, CPI data, and NFP reports is crucial. This guide breaks down how to trade around news events safely and strategically.
What Are News Events and Why Do They Matter?
News events refer to scheduled economic releases or geopolitical headlines that can cause sudden market movements. Examples include:
- Non-Farm Payroll (NFP)
- Consumer Price Index (CPI)
- Federal Reserve Interest Rate Decisions (FOMC)
- GDP Announcements
- Central Bank Speeches
These events move markets due to their impact on interest rates, inflation, employment, and overall economic outlook.
What Makes News Trading Risky During Prop Challenges?
Many prop firms have rules that make trading during high-impact news events especially dangerous. These include:
- Maximum Daily Drawdowns: One bad trade can exceed this instantly
- Slippage: Your stop-loss may not fill where expected
- Execution Delays: Platforms may lag due to high volume
- Rule Violations: Some firms prohibit trading X minutes before/after news
Always check firm-specific restrictions before trading around key announcements.
Which Prop Firms Allow News Trading?
Some prop firms are more lenient than others. Here are a few that allow news trading under specific conditions:
- The Legends Trading – No restrictions but caution advised
- Lucid Trading – Permits trading during news but warns about slippage
- Instant Funding – Allows all styles including news trading
Others like FTMO or MyForexFunds often prohibit trading 2 minutes before and after major releases.
Best Practices for News Trading During Evaluations
- Check the Economic Calendar Daily: Use Forex Factory or TradingView’s built-in calendar
- Set Alerts: Receive reminders 15–30 minutes ahead of events
- Reduce Lot Size: Lower exposure ahead of high-impact releases
- Use Stop-Loss Buffers: Increase distance slightly to avoid premature exits
- Use OCO Orders: Protect both upside and downside simultaneously
These habits can save you from unexpected losses when volatility strikes.
Should You Trade or Avoid News?
It depends on your strategy. Avoiding news entirely is safest during a challenge. However, some traders specialize in trading the news with breakout or fade setups. If you’re going to trade news:
- Have a pre-defined entry/exit plan
- Trade small sizes
- Expect fast price moves and slippage
If you’re unsure—don’t trade the event. Let the market settle and reassess.
Trading the Aftermath of News Events
Sometimes the best trades come after the news. Once the initial spike fades and direction becomes clear, you can:
- Fade overreactions (mean reversion)
- Trade breakouts in new trends
- Use higher timeframes for cleaner signals
This reduces the risk of trading in blind volatility and allows for more structured risk-reward setups.
Tools to Help You Prepare
- Prop Firm Press Risk Snapshot Sheet: Helps plan for elevated volatility days
- Trade Tracker Journal: Logs performance around news to assess your edge
- Daily Goal Planner: Lets you choose “No Trade Days” when the risk isn’t worth it
All available at PropFirmPress.com.
What to Avoid
- Trading immediately before the number comes out
- Doubling down on losing positions during volatility
- Holding positions with no clear plan
- Ignoring firm-specific trading restrictions
One mistake can cost your entire evaluation. Don’t gamble—prepare.
Case Study: How One Trader Passed by Avoiding News
One funded trader with Funded Trading Plus avoided all major news days and passed their 10-day evaluation with just 7 trades. By choosing quiet sessions and skipping high-risk days, they stayed within all limits and hit profit targets with minimal stress.
Stay Smart, Stay Funded
News trading isn’t inherently bad—but it’s risky during evaluations. Know your firm’s rules. Use tools to plan ahead. And when in doubt, sit it out. Prop firms reward discipline—not drama. Play it smart and stay in the game long enough to get funded and stay funded.