# What is News trading rule?

> A news trading rule restricts opening or closing trades in a window around scheduled high-impact economic releases, usually only on simulated funded accounts.

- Source: https://pipvalley.com/glossary/news-trading-rule
- Publisher: PipValley - web design studio for prop trading firms
- Updated: 2026-10-03

In a prop firm, the news trading rule limits activity around releases such as central bank decisions or major employment data. The common form bans opening or closing positions within a set number of minutes before and after the release; the consequence ranges from removing the profit on those trades to a hard breach.

Firms restrict news trading because price gaps and spread widening around releases make simulated fills less realistic, and because some strategies exist only to exploit that gap. Many firms allow news trading in the evaluation and restrict it only in the funded stage.

The rule needs a defined calendar source, a defined list of covered events and instruments, a defined time window, and a defined penalty.

## Why it matters

News rules are among the most disputed rules in the industry because traders often learn about them only when a payout is reduced. If you keep one, link the exact economic calendar you use, list which events count, and say clearly whether the evaluation and funded stage differ. A news allowance can also be sold as a paid add-on.