News restrictions are the rule people most often assume they understand and most often read wrong — because on many plans the permission is not the same during the evaluation as it is once the account is funded.
Two rows, not one
Plans state news trading twice: once for the assessment and once for the funded account. It is common for a plan to permit it throughout the evaluation and prohibit it afterwards, and a trader who read only the first row will breach a rule they were confident they had checked.
Why a firm restricts it
Not because news trading is illegitimate. Because of what happens to execution when liquidity vanishes for a few seconds.
A stop order is an instruction to trade at the best available price once a level is touched, and in the seconds around a major release the best available price can be a long way from the one you specified. Your intended $200 risk becomes $900 not through any error of yours but because there was nothing to fill against on the way down.
A stop is an instruction, not a guarantee. In a fast market the difference between those two words is the entire loss.
Simulated accounts add a second problem. A demo environment fills against a price feed rather than against real resting orders, and in a violently moving market it can produce fills that a live account would never have received. The restriction protects the firm from a result that is an artefact rather than a trade.
If it is permitted on your plan
- Size for the gap, not for the stop. Assume the stop fills materially worse than placed and check that the position still leaves the daily limit intact if it does.
- Know the exact release times for the instruments you hold, including the ones you did not intend to trade around — a position held through a release is a news trade whether or not you meant it as one.
- Prefer entering after the initial move. The second move is slower, better supplied with liquidity, and considerably more tradeable than the first three seconds.
- Watch spreads before the release rather than after. A widening spread is the market telling you liquidity is leaving, and it is visible in advance.
If it is not
Then the calendar is a schedule of times you are flat, and that is a workable constraint rather than a hardship — most of the scheduled releases that matter are known weeks ahead. The failure mode is not deliberate news trading; it is a position left open through a release nobody had diarised.