Write an Election Night Plan Before the Polls Close
Posted: Wed Oct 28, 2026 7:27 pm
Write an Election Night Plan Before the Polls Close
A national election is scheduled, and your open positions include a long in the country's currency against the dollar. Polls show a close race, and the market has widened its implied volatility. Write the plan.
Step one, quantify the exposure. Suppose the position is 0.50 lots with a stop 60 pips away, risking 300 dollars, which is 3 percent of a 10,000-dollar account. That is large before an event of this kind.
Step two, scenarios. A: the market-friendly candidate wins, and the currency rallies 150 pips. B: the other candidate wins, and the currency falls 250 pips, gapping through your stop. C: the result is unclear for hours, with erratic price action.
Step three, the loss in each. In B, a 250-pip fall costs 1,250 dollars, 12.5 percent of the account, far above the planned 300.
Step four, choose an action. Close the position before the vote. Reduce to 0.10 lots, where scenario B costs 250 dollars, 2.5 percent. Or hedge with an option, if available, paying a premium for a defined loss.
Step five, rules for the night. No new positions until the result is clear. No trading during the first 30 minutes after results, when spreads are widest.
Step six, review afterward: what happened, and how did the plan perform?
Writing it down prevents impulsive decisions during the stress of the night.
Your turn: write a half-page plan for the next major event on your calendar.
A national election is scheduled, and your open positions include a long in the country's currency against the dollar. Polls show a close race, and the market has widened its implied volatility. Write the plan.
Step one, quantify the exposure. Suppose the position is 0.50 lots with a stop 60 pips away, risking 300 dollars, which is 3 percent of a 10,000-dollar account. That is large before an event of this kind.
Step two, scenarios. A: the market-friendly candidate wins, and the currency rallies 150 pips. B: the other candidate wins, and the currency falls 250 pips, gapping through your stop. C: the result is unclear for hours, with erratic price action.
Step three, the loss in each. In B, a 250-pip fall costs 1,250 dollars, 12.5 percent of the account, far above the planned 300.
Step four, choose an action. Close the position before the vote. Reduce to 0.10 lots, where scenario B costs 250 dollars, 2.5 percent. Or hedge with an option, if available, paying a premium for a defined loss.
Step five, rules for the night. No new positions until the result is clear. No trading during the first 30 minutes after results, when spreads are widest.
Step six, review afterward: what happened, and how did the plan perform?
Writing it down prevents impulsive decisions during the stress of the night.
Your turn: write a half-page plan for the next major event on your calendar.