We allow news trading on challenge accounts.
However, on all simulated funded accounts, opening trades during high-impact news events, also known as red folder news, is restricted within an 8-minute window (4 minutes before and 4 minutes after the event). You are allowed to hold existing trades during this period, but no new trades can be opened.
If any trade taken before the restricted window hits take profit during this 8-minute period, the profits from such trades will be removed, but this will not result in an account violation but this does not apply to trades opened at least 2 hours prior to the news event.