The 2020 US presidential election was very competitive and one of the most talked-about events of the past year. If you remember anything from it, one thing that you might recall is than-president Donald Trump repeatedly warning Americans that if they elected Biden instead of him, the stock market would see its biggest crash of all time.
This proved to be wrong, as the market experienced a total opposite – the Dow Jones Industrial Average had its best month since January 1987 in November, soaring as much as 12 percent.
Trump started talking about this a long time before the presidential election. Almost every time the market would experience some type of an uptrend, he would remind his followers on Twitter that it had happened because he was the president. Furthermore, he would add that under Biden’s leadership, such a thing would not happen and the market would experience a massive drop if he was elected.
As the election day neared, it was cleared that the market was preparing for a certain momentum, but how things would develop was very much unclear. Prior to the elections, during the debates between the candidates, numerous markets experienced drops. This included the stock market as well as the Forex trading market, where the USD was depreciating after every presidential debate.
The 2020 election did have a huge influence on many markets, in addition to many others, the election’s impact on Forex markets was huge around the world. Because of the ongoing events, the market volatility increased a lot and while it was used as a positive development for some, others saw it as too risky to trade.
What can be learned?
There were many things that investors learned from the Biden and Trump rally of the stock market, and one of the main things was that things are not always the way they seem to be. Many people, not only Trump, expected the market to depreciate after the election of Biden, but it did not quite happen that way.
Although many thought that the market would experience a downfall, it was proved to be wrong. There are many things that can be learned from this whole situation. One of the most important things is that it is very important to plan trading positions not only depending on one certain thing but on many indicators.
To better understand how the prices are moving in the market, it would be very useful to follow a certain, detailed guide to stock trading for beginners and see how the market actually works and what are the different factors influencing the changes in the market.
Analyzing & research
While trading, it is very important for investors to do a thorough research of the markets before making any moves. There are different types of analysis that traders do to better understand the price movements in the markets.
For example, some traders are using very detailed fundamental analysis, which is the process of analyzing the ongoing events in the market and finding the possible ways the prices could change.
While doing fundamental analysis, traders are using statements of influential people, reports about companies, and many other things to determine how these things can influence the price movements. Many of the traders are also using trading calendars, which provide them with important information about the upcoming events that could influence the changes in the market.
By being up to date with these types of events, traders are able to better plan their positions. However, in many cases, simply following the fundamentals is not enough. In the case of the 2020 Presidential Elections, many people planned their positions according to the general idea about the events that could happen after the elections.
But, it proved to not be enough. To make sure that your ideas about the possible price changes in the market are correct, it is always a great idea to look at the technical side of trading. Those who are doing so are using technical analysis.
When you are using technical analysis, you are essentially using different types of indicators that are applied on the charts of the assets that you are trading. Thanks to these indicators, you are able to determine a lot of things about the current market conditions.
You can tell what are the current trends in the market, what are the support and resistance levels, and what are the possibilities for changing the current situation. Thanks to this, traders are able to confirm their ideas about the possible directions the market could take. Many traders are using both fundamental and technical analysis together for the best outcome.
2020 US presidential elections were one of the most intense and most talked about elections in many years. Both the actual election, the prior, pre-election period, as well as the events that followed had their own influence on the market movements.
Many things can be learned from the situation. First of all, it is the fact that you should never trust only one indicator of the price movements. Then, as a trader, you should make sure that you are able to respond to the risks in the market in the right way.
All in all, many things can be learned from the Biden and Trump financial market rally. It had a huge influence on the financial markets around the world.
