Here is how you should trade the US Elections

This is the best strategy that you can use to trade the US Elections:

Don’t trade it!

What if I already have an trade open?

Just close it my friend!

Look traders, there is one basic principle that you should never violate:

Trade when the risk is worth it!

When you have no idea of what could happen, then it’s not worth it!

That simple my friends!

Yes, you’ll see traders and analysts forecasting or trying to trade it, some of them will nail it down! But don’t be fooled, because that’s pure luck! There is no way of knowing ahead of time how is the market going to react!

Some say if Trump wins its US dollar bearish, if Hillary wins it will be US dollar bullish, etc.

But how many times you’ve seen the market move against the fundamentals?

Probably a thousand times!

So you never know…

Trading for a living is not about unexpected gains! Actually, we don’t care about them!

With that being said! There are a few important aspects of the markets and the US elections…

Mexican Peso correlation to the US Elections

usdmxn-image

Some say the Mexican peso will predict the final outcome:

Mexican peso’s swings are measure of US election race
Dollar, Mexican peso slide on U.S. election uncertainty
Mexican Peso: The Hot Proxy Bet for the U.S. Election

Here is the USDMXN chart, take a look at the last gap:

usdmxn

That last gap happened after the FBI reopened Hillary’s email accusations. These kind of swings are the ones you can expect to get during the US Elections…

Other than that, there is no clear direction on the Mexican Peso, and for that reason you are better off staying on the sidelines.

S&P 500 Reaction

Take a look at the S&P 500 chart:

sp-500

The SP reacted to the main support level, which is an indication that it will continue its way up, at least until it hits the next LT level at 2192.7

This was again, the reaction to the whole reopening accusations thing…

Gold (XAUUSD)

It’s well documented that a Trump win will be gold bullish and a Hillary win will be XAUUSD bearish.

Again, that’s only what we are all expecting!

Overall, I think the market will move very slow, and once the results start coming out, we are going to see some wild swings!

So I’m staying out of the market today! No trades for today!

What are you going to do?

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Raul Lopez

I've been trading the markets for more than 15 years. I believe the best way to trade is by adapting to the market conditions. You can learn it too, join our community .