The Midterm Market Whipsaw:
3 Trading Lessons Worth Remembering

Sponsored by Pepperstone.

What a week in the markets!

A massive post-midterm rally on Wednesday, followed by a brutal reversal in the Nasdaq on Thursday.

Rather than trying to explain the politics or predict what happens next, I wanted to look at what the price action was actually telling us.

Three useful trading lessons from the week:

• Uncertainty: Why simply knowing the outcome of a major event can be a bullish catalyst in itself.
• Relative strength: What the difference between the Dow and Nasdaq was telling us about underlying demand.
• The Day Two Trade: Why waiting for the initial reaction to play out can sometimes give you a much better trading opportunity.

Plenty of useful observations here that apply to elections, earnings, CPI, FOMC and other major market-moving events.

A slightly different episode this week, but hopefully one that gives you a few ideas to add to your trading playbook.