Forex trading and parliamentary elections in the UK

Elections of the President or Parliament are one of the main fundamental factors that can have a strong impact on the exchange rate.

It is at this time that a sharp trend reversal or other troubles in the form of price gaps or volatility surges are possible.

At this moment, you can not only make good money by catching the beginning of a new trend, but also lose money if you incorrectly assess the situation.

This is why it is so important to be ready to react in time as the election date approaches.

The next elections, which could have a global impact on the forex currency market, will take place in a week: on Thursday, December 12, 2019, the UK Parliament will be elected.

So what should you expect from trading during elections?

Most brokerage companies warn their clients that during the upcoming elections the following is possible:

• A sharp increase in volatility with probable trend reversals
• A reduction in the liquidity indicator to a minimum
• An increase in commissions for opening transactions, including the spread size
• A high probability of slippage when opening orders
• Gap - price gaps between quotes
• A decrease in the amount of leverage provided
• Other troubles are also possible

After such a warning, you should think carefully about whether it is worth trading during the elections or whether it is better to postpone opening new transactions for some time.

This is especially true for automated advisors , as the market situation becomes unpredictable and can differ radically from the one embedded in the advisor's algorithm.

Furthermore, brokers take other actions to restrict forex trading, including completely blocking new orders.