In short. A news trading rule restricts or forbids holding or opening positions around scheduled high-impact releases (CPI, FOMC, NFP, usually a window of 2 to 5 minutes each side). Breaking it is treated as a rule breach on some firms, as a cancelled profit on others; a few firms have no rule and only ask for the daily loss to be respected.
The rule exists because releases print several points of range in a second, which simulated fills do not reproduce. Firms that allow news trading often warn that fills around releases are at the firm's discretion.
The practical answer is a calendar and a flat position a few minutes before each listed release. The firm page shows the rule of the reference account (allowed, restricted, forbidden) from the database.
Questions traders ask
What is News trading rule?
A news trading rule restricts or forbids holding or opening positions around scheduled high-impact releases (CPI, FOMC, NFP, usually a window of 2 to 5 minutes each side). Breaking it is treated as a rule breach on some firms, as a cancelled profit on others; a few firms have no rule and only ask for the daily loss to be respected.