Our student traders and recent graduates had a special treat last night. They could experience a rare market moving event, the midterm elections’ night at the IOTAF trading floor.
As day traders, trading economic events is our bread and butter, depending on the product we trade, every week there are several opportunities to make money from data announcements. These trades usually happen very fast, we get the data, we compare it to the market expectations and based on other numbers, news, and technical analysis, we can enter the market with a profit target and a stop loss in mind.
Compared to these regular and punctual data releases, an election night is a continuous data release, over several hours, as the results for the House of Representatives and the Senate start arriving, the market reacts and as traders, we have to take fast decisions to profit from it. It’s not easy, we had to be ready for it, we had to do our homework. Here’s how the traders at IOTAF prepared for the Midterms.
During the days running up to the elections, our research team kept feeding us with essential information, news articles and research notes, about the elections and their impact on markets. As we approach the big day, we knew what the opinion polls were saying and we could see how the markets positioned themselves based on these expectations.
Tuesday afternoon, the classroom was packed for the strategy session. Marco walked us through the different scenarios, the expected – Democratic House and Republican Senate – and its impact on bonds, equities, forex, gold, oil; and three other unexpected outcomes too: a Democratic sweep, a Republican sweep, and finally a Republican House with a Democratic Senate. We were ready for any outcomes.
To wind down and relax a bit before a long night, we went to Sesame to say thanks to Tao, our research analyst, for all the hard work he put into keeping us informed. It was an amazing evening of camaraderie, a great moment for our trading community.
By 6 p.m. we were back at the office getting our setup ready, Bloomberg, CNN, Twitter, everything to get the news as fast as possible, and the results started to filter in.
Some of the students were trading live, others preferred practising on a sim account, while others were following what our senior traders were doing. Some walked away with more money, others with more knowledge. From these elections, everyone at IOTAF came out as a winner.