News-Trading Restriction

A news-trading restriction is a rule that constrains trading during scheduled high-impact news. The exact form ranges widely: some firms ban opening or closing positions within a set window around flagged events, some require you to be flat before the release, some only apply it on certain account types or only to gains made during the window, and some have no restriction at all. The events that count are typically the "high-impact" entries on a firm-specified economic calendar (rate decisions, inflation prints, employment data). The motivation is risk: news moves can blow through stops with slippage and gaps that the firm cannot hedge cleanly. Because the windows and covered events are so firm-specific, this rule is a frequent source of accidental breaches.

In plain English — A news-trading restriction limits or forbids holding or opening trades around scheduled high-impact economic events, such as central-bank decisions or major data releases. Firms impose it because news can cause violent, gapping moves and wide spreads that distort their risk. The restriction is usually a window — for example a few minutes before and after the event — and which events count varies by firm.

A firm may prohibit opening or closing trades within 2 minutes either side of a high-impact release. Entering a position 30 seconds before a rate decision could be flagged as a breach even if it ends up profitable.