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
Some say the Mexican peso will predict the final outcome:
Here is the USDMXN chart, take a look at the last gap:
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:
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…
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?