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Donald Trump President: Are Bulls Killing Bears?
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Donald Trump President: Are Bulls Killing Bears?

The shock Trump election win sent markets into mayhem. How should algorithmic traders adapt their strategies to high-volatility, fast-changing market conditions driven by political uncertainty?

By Cesare Gonzi
Donald Trumpmarket volatilityalgorithmic tradingS&P 500USA electionstrading strategies

Are Bulls killing Bears?

The uncertainty of financial markets due to Trump election is the reason why it's time to surf the wave

The shock win by Republican candidate Donald Trump has immediately sent global markets into mayhem. Many analysts predict the end of the world, but none exactly knows where markets are leading to. Next day from elections, financial markets indicated that Wall Street could suffer for the next months because of Trump's election, but before closing, they gave a different feedback. The picture below shows exactly this behavior.

S&P 500 and USD reaction to Trump election

We do not have the key to forecast future, but assuming that markets will have a greater volatile due to the nature of President Trump, it is easy to forecast winning strategies based on volatility. The suggestion for all algotraders in this framework is to code trading systems based on volatility explosions and fast closes.

Do not hold positions opened for more than a couple of days because fast changing due to Trump's crazy decisions could erode all the profit. Do not look for huge performances, let the profit run for a while and monetize it, do not wait to have more, because it is not the time to stay inside the market, but it is time to know the doors, get into the market, have a coffee and come out.

Trump is a great catalyzer and he will allow traders make very good money if they accept US President rules.

Keep trading, keep believing, keep fighting the market

โ€” Cesare Gonzi

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