Major economic releases like NFP, FOMC, weekly Crude Oil inventories, etc., can result in wild market moves. These can work for or against the trader.
Some evaluators prohibit trading around these releases, typically requiring that the trader’s positions are flat for one minute before and one minute after any release.
It’s important to be very aware of the economic calendar and if participating in an evaluation with these rules to adhere to them. Breaking this rule is typically an immediate failure.
You’ll find other similar rules at some evaluators, generally in “funded” accounts that seek to reduce risk by prohibiting trading when the market is near to exchange price limit thresholds. These thresholds are based upon the daily change percentage from the previous day’s settlement price.
You can learn about price limit circuit breakers for each product at the CME website.
Evaluators that don’t want traders participating when prices are near circuit breaker levels typically have a rule to the effect that “trading is prohibited when price is within x% of the exchange price limit”. So… if a particular futures contract has an exchange circuit breaker price limit of 7% and the evaluator forbids trading if price is within 2% of a price limit, you cannot trade if the contract is 5% or more away from its previous settlement price.
