Election risk: how do you trade around national votes?

FTC Community TeamStaff17 Sept 202615 views

Elections move currencies through policy expectations, and the moves arrive in polling waves rather than one release. Position squaring before the vote, then gaps at the open — the whole playbook is about surviving uncertainty.

Election risk: how do you trade around national votes? — risk-reward diagram — A risk-reward ratio of 1 to 2

What's your approach?

the currencies whose elections you follow
whether you reduce or hedge into the vote
an election that taught you something

Election risk: how do you trade around national votes? — candlestick anatomy diagram — The parts of a candlestick: wick, body, open and close

The risk-on risk-off guide covers the mood shifts elections trigger.

Background: Risk-on, risk-off explained: how market mood moves currencies

When investors feel confident, higher-yielding and commodity currencies tend to rise; when fear takes over, the yen, franc and dollar often gain. How risk sentiment works and how to spot a shift.

What does risk-on mean in forex?

A period when investors are confident and willing to take risk, which tends to lift stocks, higher-yielding currencies and commodity currencies such as the Australian dollar, while the yen and Swiss franc weaken.

Which currencies rise in a risk-off market?

Typically the Japanese yen, the Swiss franc and often the US dollar, as investors look for safety and liquidity.

Read the full guide

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