Glossary
News trading rule
A news trading rule limits trading in a short window around major economic news releases.
What it means
Prices can move sharply when data such as interest rate decisions, inflation figures or employment reports is released. Spreads widen and orders can fill at worse prices. Some firms restrict trading around these events, especially on funded accounts.
A typical rule bans opening or closing trades within a few minutes before and after a high impact release, for example 2 minutes either side. Some firms allow holding trades through the news but not opening new ones. Others allow news trading in the challenge but not on funded accounts, and some allow it everywhere.
Firms usually name the economic calendar they follow. Traders should check it, and the exact window, before each trading week.
Worked example
A firm bans trading 2 minutes before and after high impact news. The US jobs report is released at 8:30 in New York. A trade opened at 8:29 breaks the rule. At some firms, the profit from that trade is removed, rather than the account failing.
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