News trading is a strategy that takes advantage of sharp moves in economic or geopolitical events to make quick profits. This approach can offer exciting opportunities, but also carries significant risks such as slippage, large spreads, and unpredictable volatility. Therefore, to manage risk and protect capital, many proprietary trading firms impose restrictions on this type of trading. In today’s article, let’s explore Prop Firms that allow News Trading with PF Insight and what to consider before buying to maximize profits.
What is News Trading?
News trading is a strategy where traders make decisions to buy and sell assets based on economic events and news. This strategy is often used in the foreign exchange market, where prices fluctuate widely. The main goal is to make quick and effective profits by taking advantage of unexpected market movements due to news.
News Trading is attractive, but it is also risky. The market can react unexpectedly and create strong, uncontrollable fluctuations if an event turns out differently than expected. This phenomenon is called “news shock” – a rapid reversal in price. Traders can suffer large losses if they lack an effective risk management strategy.
Why do traders prefer trading the news?
News trading can bring traders the following benefits:
- Make informed decisions: Economic and political news provide information on market trends and conditions. Keeping track of important events helps traders understand the factors that influence price movements. This allows traders to increase their chances of success when analyzing and adjusting their strategies, as well as making informed buying and selling decisions.
- Reacting to market volatility: Traders can react quickly to news events by planning ahead rather than wasting time analyzing the news after it is released. Sometimes it can take hours or even days for prices to fully reflect the impact of an economic report on the forex market. Traders can benefit from the initial volatility and maximize profits by planning ahead.
- Maximize profits: With news trading, traders can benefit from market reactions to important events. These reactions result in sudden price changes, creating arbitrage opportunities. When used correctly, this strategy helps traders maximize potential profits and benefit from market volatility.
In short, news trading gives traders a significant advantage in terms of being able to absorb information quickly, proactively and efficiently. This allows them to maximize profits by taking advantage of market movements. This method will help to increase profits effectively when combined with a reasonable risk management plan.
News trading method
Depending on whether the news event is announced as planned or as a surprise, traders can use different strategies in news trading.
Periodic economic events
Elections, corporate earnings reports, and economic reports are examples of scheduled news events—events that are released in advance at a specific time and date. This volatility allows traders to better plan their trades.
- Economic calendar: An economic calendar is a tool that traders can use to keep track of upcoming news releases and their expected impact on the market. This allows them to easily plan their trades and adjust their positions.
- Reliable news sources: Traders should follow reliable news feeds that provide information about upcoming events. This helps them better understand the fluctuations over time, allowing them to make more accurate and successful trading decisions.
- Technical analysis: Combines a news calendar with technical analysis. By examining price charts and indicators, traders can identify important support and resistance zones as well as potential entry and exit points.
Unexpected economic and political events
Unexpected news events such as financial crises or geopolitical tensions are unforeseen events that can impact the markets. Traders need to have a proper risk management plan when trading in this environment.
- Risk management: Risk management is essential as sudden news is unpredictable. To minimize the impact of large and unexpected fluctuations, traders should set reasonable stop-loss orders, limit trading volume and control positions.
- Stay informed: To quickly detect unexpected fluctuations, traders should follow market news and events. Being informed quickly allows them to react quickly and adjust their trading strategies to unexpected developments.
- Be calm and patient: When trading against unexpected news, traders need to be patient and cautious. Waiting for a clear signal or for the market to stabilize before entering will minimize risks as market volatility is often very strong and unpredictable.
Advantages and disadvantages of news trading
While trading the news has some benefits, there are also some risks. Let’s take a look at the benefits and limitations of this strategy.
Advantage
- Identifying Entry and Exit points: Key moments in market news can lead to potential trading opportunities. Traders can use price reaction to identify specific entry and exit points. This helps them gain confidence, develop a clear trading strategy, and increase the accuracy of their choices.
- Profit opportunities: The market often experiences significant volatility due to important events and reports in the economic calendar. Keeping track of this information will give traders an advantage in planning their strategies, allowing them to take advantage of price movements caused by the news.
- Building the optimal strategy: The economic calendar is an essential tool for traders who want to plan their trades and react quickly to information about events. This allows them to seize opportunities and avoid missing out on significant changes.
Disadvantages
- Unexpected volatility: Traders can experience unexpected losses if the market reacts differently to a news event than expected. When trading news, this is a common risk that requires careful planning and risk management.
- Large slippage: Sudden and sharp price movements are often caused by news, making the market difficult to control. This poses many risks and increases the possibility of slippage.
- Spreads: Some brokers may increase their spreads during important news events, which will increase trading costs and limit potential profits.
Top 7 Prop Firms that allow News Trading
In addition to the list of Prop Firms that allow News Trading, these companies also offer attractive funding programs, fast payment processing, and sustainable development opportunities, all of which help traders maximize their experience and increase their potential profits.
Apex Trader Funding
Apex Trader Funding gives traders the flexibility to trade any major news event in the futures market. With no restrictions or trading barriers, you can confidently trade market movements, regardless of the news – be it inflation, the Federal Reserve, or jobs. As a Prop Firm that allows News Trading, Apex offers high profit sharing rates ranging from 80 to 90% for challenging trades. Depending on your risk tolerance, you can choose between fixed or decreasing rebates. This adaptability allows you to customize the strategy to your trading style, especially when trading news in volatile markets.
Funded Trading Plus
Funded Trading Plus offers a realistic trading environment that allows and promotes news trading. Weekend trading is also allowed, and there is no time limit to complete the challenge. This creates a unique combination of freedom and flexibility, ideal for traders who like to take advantage of market opportunities. You can choose the traditional two-step model or the one-step challenge with a 10% target. Both allow for news trading. Plus, you get paid as early as 7–14 days after reaching your target and can receive a profit share of up to 90%.
Bulenox
One of the Prop Firms that allow News Trading cannot be ignored is Bulenox. You can benefit from periodic or unexpected market events with the effective trading strategies of this platform. For trend and momentum traders who are constantly looking for opportunities from market fluctuations, Bulenox is the perfect choice. You can completely avoid the assessment step if you choose the instant funding plan. This is a huge benefit for experienced news traders who want to trade with real money immediately, without any difficulties or challenges.
Alpha Capital Group
Alpha Capital Group is a Prop Firm that allows News Trading on all account types without any restrictions. There are no penalties for placing orders before news is released or reacting quickly to market movements, allowing traders to take advantage of any price movements to make quick profits. Alpha Capital Group is not only aimed at beginners, the company also focuses on training professional traders. The company helps traders maintain stability and sustainability by providing comprehensive training services, capital expansion plans and performance analysis, in addition to allowing the application of a variety of trading strategies.
City Traders Imperium
City Traders Imperium offers the flexibility to use both technical and macro trading strategies. Since there is no restriction on when important economic data is released, traders can easily profit from volatility. For those who want to get in early or react immediately to important events, CTI is the perfect choice. CTI offers three funding models – Classic, Portfolio and Direct Funding, all of which allow for full news trading. Depending on the funding package, profit sharing is up to 100% and you can expand your capital based on performance milestones.
DNA Funded
One of the great transparency policies of DNA Funded is that there are no trading restrictions related to news, political and economic events. Trading strategies are designed to be flexible by allowing traders to freely take advantage of post-event adjustments, use supporting tools, or strong volatility as soon as news is released.
Your login details will be sent within minutes of registration, allowing you to start trading immediately with flexible leverage of up to 1:100. For day traders, this is a huge benefit, as you want to quickly take advantage of opportunities during peak trading hours like London or New York.
Tradeify
When it comes to choosing Prop Firms that allow News Trading to participate, Tradeify offers traders maximum flexibility. You can trade without any restrictions, regardless of important economic events across all asset classes, including forex, indices, metals, and cryptocurrencies. Notably, the platform does not impose any latency limits or hidden rules.
The 8% profit target in Stage 1 and 5% in Stage 2 are part of Tradeify’s flexible challenge model. Traders enjoy unlimited daily gains and a maximum drawdown of 12%. News traders now have the freedom to deal with high volatility without the fear of being eliminated immediately.
Conclude
Prop Firms that allow News Trading create opportunities to profit from significant price movements caused by social, political or economic events. You can significantly increase your performance and profits by being aware of the pros and cons of this strategy and choosing a reliable firm that suits your trading preferences and risk tolerance.
Always keep risk management at the heart of your trading, stay up to date with market trends and continually improve your trading techniques to adapt to the volatility. As long as you apply the right method and discipline, news trading can be a useful tool on your journey to becoming a successful proprietary trader.
