The French election is right around the corner. This election has received a lot of global coverage, mainly because many people believe the outcome will have significant economic impact. No matter what happens during the election, one thing is certain – there will be extreme volatility in the markets.
The price of Gold could soar, the EUR might drop or the complete opposite – depending on who wins.
And of course, volatility means there is potential to make money. Many traders thrive off volatility – especially forex traders and hedge funds. Now is the time to start planning how you are going to trade.
- Choose to trade or sit it out – with the potential for such volatility, you need to be sure of your trading strategy.
- Close open positions – if you have positions that are currently open, you might want to close them before the election. Your positions may jump in the wrong direction. After the U.S election, markets did recover, but your positions may not have enough of a margin to survive the ride and you could lose everything.
- Consider copy trading – trying to manually trade the french election may not be the best idea for anyone other than professional traders. You might want to copy trade the pros and just use their moves instead of trying to guess yourself. During the recent Brexit event, the majority of traders on copy trading platform etoro were profitable.
- Be aware of your brokers rules – some brokers change the maximum amount of leverage during times of extreme volatility to protect their traders. Be aware of this and the other actions your broker may take including freezing new trades, changing the maintenance margin etc
Will you be investing in the French Election? There is certainly going to be a lot of movement in the markets.
Find out more about trading the French Election here