News Trading
Rules
News trading is entering positions around scheduled economic announcements or unexpected events. Many prop firms restrict it.
News trading is entering positions around scheduled economic announcements (NFP, CPI, FOMC) or in reaction to unexpected events. The strategy depends on capturing the rapid price move that follows the release.
Many prop firms restrict or ban news trading because the high volatility and frequent slippage create P&L outcomes the firm''s risk model cannot reliably price. Common restrictions: no positions open 5 minutes before through 5 minutes after defined news events; explicit list of restricted news releases; ban on news-trading strategies as a category.
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