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Timing insights for trading the US election

By Team Exness

24 October 2024

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The US election is more than just a political showdown—it’s an untapped goldmine for traders ready to capitalize on volatile markets. Every shift in the market could mean opportunities for those with good timing and competitive trading conditions.

At Exness, traders get the tightest spreads and most stable conditions to seize any moment.  Spreads for US30 (Dow Jones), US500 (S&P 500) and USTEC (Nasdaq) were decreased by 67%

Whether it’s gold, oil, or the S&P 500, the Exness platform ensures trading at high speeds and no surprise commissions. For example, 

This election may well shake the global economy, and savvy traders would be wise to have their Exness Trade app active along with US500, XAUUSD, and USOIL charts at the ready.

If you’re planning to trade 2024 election fever, check out these timing insights that every trader should know.

Timing to enter the market can be crucial, and determining the best time to enter can be challenging. Traders can observe past volatility surrounding the elections to help them time the market. Being at the right time will help to reduce unnecessary risks and better manage expectations to avoid late exits.

Volatility before election

According to the Financial Market Research Desk of Exness, volatility around 2-3 weeks before the election day usually depends on the ongoing pre-election poll. The higher the certainty of the potential results, the more concrete markets’ expectations that can affect the overall markets.

  • Blue line = Gold volatility two weeks before the election day
  • Red line = Gold volatility one week before the election day
  • Yellow histogram = Gold performance two weeks before the election day
  • Green histogram = Gold performance one week before the election day
  • In 2016, after the reopening of Clinton’s email investigation in the final week before election day, overall markets moved very significantly due to the increased uncertainty surrounding the potential president-elect.

    Meanwhile, in 2020, market participants became more cautious as both candidates were prominent in the US political scene. With the addition of fewer swing voters in the 2020 election, which went down to 6% (according to CfP) in 2016, the polarized voters made market participants more cautious.

    According to the New York Times, around 18% of the 2024 voters are undecided, potentially causing volatility like in 2016. The condition could create price consolidations, allowing traders to trade within price ranges, such as the mean reversion strategy.

    Volatility on the election day

    During the election day in the last two elections, the results varied from one to another. During the 2008 election day, which Barack Obama eventually won, some assets moved more significantly than the following elections.

    • Blue line = Gold volatility on the election day
    • Red line = Gold performance on the election day

    The election result dynamics will most likely affect the asset price movement in the direction that market participants favor, which has yet to be apparent.

    Indecisive results

    When a more meticulous approach is taken to counting the ballots, the final results can take longer, making traders stay on the sidelines until the potential results are more apparent. Such a condition can cause the overall asset to stay sideways for quite some time, reducing the volatility significantly.

    Post-election volatility

    • Blue line = Gold volatility two weeks after the election day
    • Red line = Gold volatility one week after the election day
    • Yellow histogram = Gold performance two weeks after the election day
    • Green histogram = Gold performance one week after the election day

    Since the 2008 election, post-election volatility has increased significantly relative to the pre-election one, except for the 2012 election, due to Obama’s dominance. However, the most volatile time occurs not on election day but several days after election day. The most volatile day post-election ranges between 1 and 17 days after the day, which various factors can cause.

    Generally, when market participants have seen more apparent results, they will act according to whether the policies will benefit or detriment the assets. For example, Republican winning may reduce geopolitical tensions in Eastern Europe, hurting the sales of defense-related companies, such as Lockheed Martin (LMT).

    In the 2024 election, the most volatile day could happen within two weeks after the election day, as uncertainty remains high and the current poll remains tight.

    Conclusion

    Two contrasting Presidential candidates are about to trigger epic swings in the coming weeks. This election, take advantage of our low, transparent costs and commission-free trading on Pro and Standard accounts. With fast execution speeds and 24/7 live support, you’ll have proven resources to react swiftly. Plus, our commitment to fund security means your money is safe, accessible, and yours—period. Join the 800k+ traders who choose Exness every month and get started today.

    *Average or max spreads, excluding agent commission, for the first two seconds after high-impact news, from January to May 2024, compared against five other large brokers. Spreads may fluctuate and widen due to factors including market volatility, news releases, economic events, market opening or closing, and the type of the instrument.


    This is not investment advice. Past performance is not an indication of future results. Your capital is at risk, please trade responsibly.


    Author:

    Team Exness

    Team Exness