Newbie traders will ask this question Professional traders wouldn't. Because we don't have a powerful and reliable crystal ball. When there is a signal to short, we will short with say 10 lots of index futures. first 5 lots, we target Reward : risk ratio of say 3:1. Next 5 lots, they hold on for a long period because we don't know how far the market will go down.
My guess is that if the Democrats sweep, the stock market will initially rise, if not, the markets will initially fall. Right now, both the market and the economy is being propped up by the Fed pumping money into the economy. The Democrats have already signaled that they are ready to pass another big stimulus, and Republicans say no more big stimulus.
Trying to time the stockmarket using the news is a losing proposition for a long time now. If you have to rely on the news, it is best to fade it and do the exact opposite.
Morning maxinger, I like your comment. I agree with you on this part. I use to get excited about election night and try to make big money trying to get a board a big drop or rise. This only led to stressful night and non sleeping night after take big loss because not wanting to exit or moving stop loss backward, because stop loss distance is big. My trading plan is trade from morning to noon. I personally do not see the benefit for me getting excited about one night to trade. I'll sleep that night and wake up and trade as I normally do. It best I just stick to my own trading agenda and forget all the pony and clown show of election night.
I'm long-term trading the election so I'll be waiting for at least the NY close Wednesday before making a move, preferably bullish. The most frustrating outcome would be a hung result - legal wrangles could last weeks.
In the year 2019 the Argentina Merval Index (IAR) sold off 40% in one single day after the conservative party did NOT gain the majority. A HUGE red candle that closed on the lows, 40% down. Similar drop in SPX would put it at about 2000 and fill all those huge gaps from March lows.
IF Biden wins? Just so you know ....he ain’t gonna win. Mr T will garner nigh 300 electoral votes or more. Just you wait and see. You won’t have to wait long.......LOL