Two different problems
News creates two separate risks. The first is a rule risk: the firm may ban or discount trades near an event. The second is a market risk: spreads widen and fills slip regardless of any rule. A strategy can pass the first and fail the second, or the reverse. Test them separately.
The rule risk in four firms
The5ers bans executing orders from two minutes before to two minutes after high-impact news, and removes any profit made then. FundedNext counts only 40% of profit from trades placed within five minutes of an event on a correlated pair, while losses stay. Alpha Capital forbids opening or closing a trade on the targeted instrument within five minutes either side. The Trading Pit allows news trading on Futures Prime but may review accounts that trade only around news. The common thread is that the rule is attached to time, not to your intent. A stop that triggers inside a window is an execution inside the window at some firms.
Which calendar and which clock
The5ers says it uses Forex Factory for events and follows server time. A difference of a minute between your clock and the server can place a trade on the wrong side of a window. Confirm which calendar defines high impact and whether revisions are included. Ask in writing.
Slippage and spreads
At a release, liquidity thins. Spreads can widen to several times normal and fills can occur far from the quoted price. A market order sent at the print can fill at a level that never traded on the chart you test on. The Trading Pit warns that slippage can push a loss past its daily pause and past the maximum drawdown, which breaches the account.
A cost illustration
Suppose a strategy normally pays 1 pip of spread per trade and makes 3 pips gross. Net is 2 pips. At a release the spread widens to 6 pips and slippage adds 4. The same trade now costs 10 pips against a 3 pip gain, a net loss of 7. One such trade is larger than three normal winners. This is why a backtest on mid prices overstates event trades.
Holding through news
Holding a position through an event avoids the execution window at The5ers, which allows open trades through news. It does not avoid the price move. A stop that is hit during the move exits at the stop or worse, and an equity-based floor can be breached by the spike before any stop executes. See intraday equity breaches.
How to test
Mark every event in your history from the calendar the firm uses. Remove or flag trades inside each window. Recompute profit under each firm's treatment: deduction, 40% counting or exclusion. Then stress costs: multiply spread and slippage on event trades by a factor of five and see whether the edge survives. Keep both results.
Practical rules
Place protective stops before a window opens if exits are blocked. Reduce size before a release if your floor is tight. Avoid adding to positions in a window. If your edge is event driven, choose a firm whose rule is a review right and not a ban, and read the page on news trading restrictions for the comparison.
Why historical event data is thin
Major events occur only a few times a month for any instrument, so an event-heavy backtest has few observations. A handful of events can dominate the result, and one adverse print can erase many small wins. Treat the event-trade sample as small, widen your error bars and avoid sizing up on the strength of a few good releases.
Choosing size around events
A simple rule is to cut position size by half or more before a high-impact release, or to stand aside unless the strategy has a tested edge there. The saved risk is a price you pay in missed profit, and that trade-off is easier to accept when your floor is tight.
Keep a calendar record
Save the event calendar you used for each test and note revisions. When a firm disputes a trade, a record showing the event time and your fill time is your evidence.
How this was sourced
Official material checked for this draft on 2026-10-27. Product terms, residence eligibility, promotions, payout rules and fees can change. Reverify before publishing or purchasing.
Editorial disclosure
QuantProp has no verified commercial relationship with the firm(s) discussed in this article. This is an independently drafted rules comparison, not an endorsement or proof of payout reliability. No affiliate links are active. Trading evaluations can involve fees and substantial loss or failure risk.
Revision log
2026-10-28: imported from the editorial pack dated 2026-10-27; approved for publication by the owner. Facts are as of 2026-10-27 and were not independently tested. 2026-10-28: Rewritten from a 222-word stub. Added the news rules read on official pages on 2026-10-28 (The5ers, FundedNext, Alpha Capital, The Trading Pit), the slippage mechanics, a spread-cost illustration, a test method and Q&A.
Frequently asked questions
Why does news trading fail in prop evaluations?
Because of two effects: firm rules that ban or discount trades near events, and market effects such as wide spreads and slippage that backtests on clean prices do not capture.
What is the news window at The5ers?
Orders may not be executed from two minutes before to two minutes after high-impact news. Profits made in the window are deducted and losses are absorbed by the trader.
How does FundedNext treat news trades?
On funded accounts, trades placed within five minutes before or after a high-impact event on a correlated pair count for only 40% of their profit, while losses remain the trader's responsibility.
Can slippage breach a prop account?
Yes. The Trading Pit notes that slippage can push a loss past its daily pause and past the maximum drawdown, which breaches the account.
How should I backtest around events?
Flag trades inside the firm's windows, apply its treatment to their profit, and stress spreads and slippage on event trades to a multiple of normal.