If you are here to look for some kind of strategies to trade the U.S. election, I’ve got none.
If you are here to hear my opinion on what would be the outcome of this election, I will tell you later…maybe when the result is out so I can be sure of it.
Alright, I’m not trying to be sarcastic here but rather I just want you to know something before you choose to engage any trade during this period of time or in short, trade the U.S. election.
So here are three things I would like to share with you:
1) No one knows the outcome:
You have probably heard a lot of opinions, analysis and predictions on what the outcome may be, be it Trump wins or Clinton wins. But lets get real. No one knows the result until it is out. So the question is how are you suppose to trade? Is it still trading or is it just betting? Do you have a plan to trade the U.S. election at different phrases of the election?
I am not saying that there is no way to trade at all, but you gotta at least have a plan. As a trader, I do not want to guess what would the result be because I will never know no matter how many years of experience I have with trading. Even if I do and I got it right, it means nothing at all. Guessing it right doesn’t mean you will make the right trading decision at the right time. You might have picked the right direction to trade but you may also execute the trade at the wrong time and get yourself stop out before it even moves in your direction.
And also think about it this – Does your trading stratgies apply to trading the U.S. election? If it doesn’t, why are you trading? If it does, I really don’t understand how you have been trading so far in a normal market condition.
2) The Outcome of The Result Does not Guarantee a Standard Market Movement
If the Fed raise rate in December, the U.S. dollar will appreciate. If Trump wins, the dollar will plump. If this happen, that will happen.
Do you remember what happened the last time when RBA and RBNZ cut rate? Do you remember what happened when BOJ announced additional stimulus? Did the market react the way it should be? No.
The market changes again and again and it is the responsibility of traders to learn about it over and over again. There is now no fixed or so-called standard way of how the market should behave. Even if you know what the outcome of the U.S. election is, it doesn’t neccessary means that the market will move in a standard way.
Trading is all about planning and managing your risk because nothing is certain. It is a game of probability and traders look for the best way to increase that probability and manage the trade in their best advantages.
3) It is once in a lifetime opportunity and I don’t want to miss it.
An opportunity that you do not know how to manage can become a disaster instead. If you have no idea what’s gonna happen and you have no trading plan to engage this major event, I suggest you leave it aside. You will pobably feel thankful for not doing anything after watching everything.
But if you just have to trade no matter what, you need to first acknowledge that you are taking a gamble here. Once you got that, decide how much of your capital you want to risk with. Make sure whatever percentage it is does not affect your trading in the future and it is not too much that you cannot afford to lose. You must be in control of your emotion when thing goes wrong.
If you make money, celebrate. If you don’t, move on.