Trading Forex and Stocks during the US Elections 2020. The power of supply and demand imbalances

The outcome of the US presidential election 2020 is on a knife edge, with Donald Trump and his rival Joe Biden neck and neck in key swing states. As a Forex or Stock trader, you will probably be scared by the high volatility of the markets during the elections.

As a supply and demand trader, you should not worry about the US Elections 2020 results. Whether Trump or Biden wins doesn’t matter because the markets and the thousands of investors are already positioned. A long-term bullish or bearish stock or Forex cross pair will not change because Trump wins or loses. Price action might indeed get a bit wicky with pin candles as the investors react to news and forecasts. You will also see a lot of noise if you look at the smaller timeframes and ignore the long-term timeframes and bias for the stock and forex markets.

To be elected as the US president, a candidate must win at least 270 votes in the electoral college. Each US state gets a certain number of votes partly based on its population, and there are 538 up for grabs. But you don’t necessarily need to know all these details about the elections. As a supply and demand stock and forex trader, you need to know where the imbalances are located and what the bias is for a particular asset.

As explained in previous analyses and posts, I said the same during the COVID-19 pandemic early in 2020. Most stocks sold off very rapidly. The world was going to end; the stock market was shattered. No, it was not. Huge imbalances took control, and now both Nasdaq and S&P500 indexes have already broken pre-COVID-19 all-time high prices. The virus did nothing but provide the pullback to lower prices to buy very cheaply.

US presidential election 2020 and Forex Trading

You may probably remember some of my last updates for the Dollar Index #DXY and EURUSD forex cross-pair. The Dollar Index #DXY has a bullish bias, and the EURO has a bearish bias. Who cares about US Elections 2020 if strong imbalances are created in the direction of the expected move?

Take a look at DXY and EURUSD daily timeframe analysis below. Hopefully, you will see what I am trying to say when I refer to these imbalances. These imbalances are holding during the US presidential election 2020 because they are very strong and they are being created in the direction of the expected move. You can read the last update of the Dollar Index #DXY forecast.

See below EURUSD analysis and read prior EURUSD forex analysis. There is a daily downtrend. The imbalance at #1 played out nicely a few days ago. There is another one located slightly lower at #2, which price did not retrace yet during the US elections 2020.

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There are several ways of buying stocks and futures. When trading stocks, you can buy shares of the underlying stock. You can also use stock options strategies to go long or short at these specific supply and demand levels. Long calls or long puts or spreads. You can even buy CFD (contracts for difference) if you are in a country where it’s allowed.