i found out the hard way trading news with prop firms.
it was july 3rd, 2025. i had a clean setup going into the open. position was green. then i saw the email notification from FundingtTicks: profit deducted. $2,850 wiped from my account.
the reason? "trading during news."
i hadn't even actively traded during the news event itself. i had simply held a position through it from an entry hours before the event. FundingTicks didn't care about my intention. they cared about the timestamps.
My comments section blew up. traders were confused, angry. some argued it wasn't a "news trade." others pointed out the vague rules, the potential for firms to use these rules arbitrarily to claw back profits. one guy said, "if you lost money trading the news would they give you credit? probably not…"
that's the point.
major news events, gaps, and unexpected market shocks aren't just high-volatility days. they are storms. and in the prop firm game, they come with an extra layer of danger: the rulebook. firms use these events, and the ambiguity around them, as tripwires. trying to navigate them without extreme caution is risky for your entire account.
your only job is to survive. both the market and the rules.
Defining the Storms: Know Your Enemy.
not all volatility is created equal. we need to distinguish between the predictable “squalls” and the potential hurricanes.
Scheduled News Events (The Hurricanes): these are the big ones (FOMC, CPI, NFP). the dates are known months in advance. the market anticipates them. volatility doesn't just spike. it becomes temporarily insane, often accompanied by liquidity vacuums and chaotic price action.
Gaps (The Earthquakes): these occur when price opens significantly higher or lower than the previous close, usually over a weekend or after a major overnight event. they represent a sudden, violent shift in market perception. their danger lies in their ability to “loosen” your stop loss, potentially causing catastrophic losses.
Unexpected Shocks (The Black Swans): these are the events that come out of nowhere (tariff “liberation day”, a geopolitical crisis, a flash crash, a major bank failure). volatility explodes unexpectedly, correlations go to one, and normal market structure breaks down.
In normal markets, different assets have distinct personalities. stocks might rise while bonds fall, gold might do its own thing. but in a true panic, everything starts moving together, usually straight down. when you see the entire board flashing red in unison, that's a sign that fear has taken over rational thought.
each of these storms requires a specific survival strategy.
Hurricane Protocol: Surviving Scheduled News
we touched on this in chapter 15, but let's make the survival rules crystal clear.
Respect Prop Firm Restrictions: this is rule ‘zero’. if your firm bans trading around news, do not trade. period. violating this is the dumbest way to lose an account. know the exact time window and respect it religiously.
The No-Click Zone is Sacred: reiterate: 5 minutes before to 15 minutes after the release, you are a spectator. do not touch your mouse. the initial move is usually a trap.
Wait for Structure to Reform: after the chaos, wait for the market to establish a clear direction and form a recognizable technical setup. don't chase the first move. wait for a pullback, a consolidation, a retest of a broken level. wait for your setup to appear post-news.
Size for Survival, Not ‘Glory’: if you do trade after the dust settles, cut your normal size in half. at least. volatility will likely remain elevated. wider stops are necessary. smaller size keeps your dollar risk constant. this is not the day to be a hero.
If In Doubt, Stay Out: news days are optional. you don't have to trade them. if you don't have a clear edge in reacting to the post-news environment, the single most profitable action you can take is to flatten your positions beforehand and go on with your day. preserving your capital is a win.
Earthquake Protocol: Surviving Gaps.
while most prop firms prevent the biggest gap risk by banning overnight/weekend holds, gaps can still occur overnight or due to pre-market news. the real danger isn't necessarily the gap itself, but the voltatile, low-liquidity price action immediately after the open. this volatility can rip through stops and create unpredictable swings.
- Respect the Opening Range Chaos: if a major gap occurs (or even just unusually high volatility at the open), do not trade the first 15-30 minutes. treat this period like a post-news No-Click Zone. let the market establish an opening range. let the algorithms battle it out. let the initial panic or euphoria subside before you even think about putting on risk.
- Fade the Initial Spike Cautiously: the first move out of a gap open is often emotional and unsustainable. fading this initial spike can be profitable, but it's high-risk. wait for clear signs of exhaustion or rejection at a key level before attempting it, and use significantly reduced size.
- Trade the Gap Fill (Carefully): gaps often tend to "fill" eventually, but this is not guaranteed, nor does it always happen quickly. if you play the gap fill, wait for confirmation. wait for price to establish a clear trend back towards the gap after the opening range chaos has settled. use small size and tight stops. this is a counter-trend trade until the gap is filled and price proves acceptance back in the previous range.
Black Swan Protocol: Surviving the Unthinkable.
these are the days markets truly panic. liquidity vanishes. correlations break down (or all go to 1).
Flatten Everything Immediately: the moment you recognize a true "black swan" event unfolding (e.g., a “Liberation Day” shock), your only goal is self-preservation. get flat. cancel all orders. do not try to catch the falling knife. do not try to predict the bottom.
Go to Cash and Wait: in a true market panic, the only safe place is cash. step away from the screen. let the storm pass. it might take hours. it might take days. your job is to survive it with your capital intact so you can trade if something comes up.
Ignore the Noise: social media will be a firestorm of panic, predictions, and terrible advice. turn it off. your decisions need to be based on your pre-defined survival plan, not on the fear of the herd.
The Mindset of the Storm Survivor.
Acknowledge Your Vulnerability: you cannot control these events. you can only control your reaction to them. accept that your primary goal is not profit, but survival.
Pre-Commit to Your Rules: your survival plan must be written down before the storm hits. in the heat of the moment, emotion will override judgment. your written rules are your anchor.
Embrace the Sidelines: recognize that staying flat is a position. it's often the most profitable position during ‘true’ chaos. there is no shame in sitting out. it's the mark of a professional.
the market will always offer more opportunities. your job is to make sure you're still around, with capital and confidence intact, to take them when the weather clears. don't become another casualty of the storm.
PART IV: EXECUTION AND PASSING