It's 8:29am ET. CPI drops in 60 seconds. You're holding a position on your evaluation account, and your finger's hovering over the size button because this is exactly the kind of move that could pass the whole challenge in one print. Should you? Trading news during a futures prop firm challenge is one of the most tempting — and most misunderstood — decisions you'll face, and it's blown more "almost funded" accounts than I can count.
I'm the founder of FundedScore, and I've watched both sides of this: traders funded in a single news candle, and traders who gave back a week of progress in three seconds of slippage. Here's how to think about it clearly.
News trading in futures prop — what to know:
- Most firms we track allow news trading; a few, like Alpha Futures, restrict it
- The danger isn't the rule — it's slippage: your stop can fill far past its price
- High-impact futures events: CPI, NFP, FOMC, and the equity-index open
- A blown drawdown from a news spike ends the account instantly — verify yours first
First: is it even allowed?
Before strategy, check permission. Futures prop firms split into two camps:
- Firms that allow news trading. The majority I track let you hold through high-impact releases. That freedom is real, but it puts the risk entirely on you.
- Firms that restrict it. Some firms — Alpha Futures is one — limit or prohibit trading around major scheduled news, often requiring you to be flat for a window before and after. This protects the firm from the wild slippage these events create, and it's a legitimate rule, not a trick.
This is exactly the kind of clause that belongs in your pre-purchase research. If you're a news trader, a firm that bans it is simply the wrong firm — confirm the policy in our trader-tested reviews before you buy, the same diligence I push in are futures prop firms legit.
Why news trading wrecks evaluation accounts
Even when it's allowed, news trading is dangerous for one mechanical reason: slippage. During a CPI or FOMC release, the order book thins out and price gaps. The stop-loss you placed at a comfortable level can fill dollars beyond it — meaning your actual loss is far larger than your intended loss.
On an evaluation account, that's lethal in two ways:
- It can breach your drawdown in a single tick. If a news spike blows past your loss limit, the account is gone — instantly, no recovery. This is why understanding your drawdown type matters so much; a trailing drawdown gives you even less room to absorb a spike.
- It can violate your daily loss limit before you react. Many firms cap daily losses. A news candle can hit that cap faster than you can click.
The cruel irony: the same volatility that makes news look like a fast pass is what makes it a fast fail.
How to handle trading news during a futures prop firm challenge
If your firm allows it and you want the opportunity, do it the disciplined way:
- Know the calendar. CPI, NFP (first Friday), FOMC decisions, and PCE are the big ones for index and rate-sensitive futures. Mark them. Never get surprised into a news event.
- Size down, hard. Use micro contracts so a slippage-widened loss still fits inside your drawdown. The goal is to survive being wrong, not to maximize being right.
- Decide before the print. Either you're flat into the number, or you have a defined plan with a hard risk cap. "I'll see what happens" is how accounts die.
- Respect a wider stop's real cost. If you must hold, assume your stop fills worse than its price and size as if the loss is 2–3× bigger.
- When in doubt, sit out. Passing an evaluation rewards consistency, not heroics. There's another setup tomorrow; there isn't another account once the drawdown's gone.
The smarter play for most traders
Here's my honest take after years of this: for most traders trying to pass an evaluation, the best news-trading strategy is to be flat through the release and trade the cleaner trend that follows. You skip the slippage lottery and still capture the directional move once the book refills and spreads normalize.
If you genuinely have an edge in the chaos, trade it small at a firm that allows it. If you don't, don't let a 60-second candle decide whether you keep an account you worked to earn. Either way, the rule is the same: check the firm's news policy and your drawdown type before the number drops. Compare both across firms in our comparison table and full reviews.
Frequently asked questions
Can you trade news on a prop firm challenge? At most futures firms, yes — but the risk is entirely yours, and a few firms restrict or prohibit it around major releases. Check the firm's news policy before you buy; if you're a dedicated news trader, a firm that bans it is simply the wrong fit.
Which futures prop firms ban news trading? Policies change, but among firms we track, Alpha Futures restricts news trading. Always confirm the current rule in the firm's documentation rather than assuming — see our trader-tested reviews.
Why is news trading risky on a funded account? Slippage. During releases like CPI or FOMC the order book thins and price gaps, so your stop can fill far past its level. That can breach your drawdown or daily loss limit in a single tick — ending the account instantly.
Can you trade CPI or NFP on a funded account? Only if your firm allows news trading — and if it does, size way down with micros, because slippage during these releases can fill your stop far past its price and breach your drawdown in one tick.
Does Topstep allow news trading? Per our data, Topstep allows news trading, while Alpha Futures restricts it. Policies change, so confirm the current rule on the firm's site before holding through a release.
Related guides
- Trailing vs Static Drawdown: which rule is killing your account?
- Best futures prop firms (2026): a funded trader's ranking
- No minimum trading days prop firms (futures)
- Are futures prop firms legit? An honest answer
Trading futures carries substantial risk of loss. Nothing here is financial advice.
