Experience the market turbulence triggered by Trump's speech! Old suckers teach you how to seize trading opportunities in the game of words.

As a trader with 8 years of experience in the financial markets, from cryptocurrencies to traditional stock markets and commodities, I have long been accustomed to various black swan events. However, the public speech by Trump in the early hours of October 22nd still made me witness the strong impact of "narrative hegemony" on global asset pricing. This former president, who disrupts market expectations with his words, casts a huge stone into the calm waters of the market with every statement, and this time the ripples are clearly more penetrating than ever before. Combining my years of practical experience, today I would like to discuss how to avoid risks and seize opportunities in this "narrative storm" from four dimensions: policy interpretation, market transmission, historical patterns, and trading strategies.

1. Anticipating Policy Trends: Trump's "Three Cards" Conceal Market Secrets

Trump's speeches have never been aimless; analyzing his past policy logic, the core revolves around three cards: economic stimulus, trade games, and geopolitical stance. Each card played could become a trigger to ignite market sentiment.

1. Economic Policy: The "Double-Edged Sword" of Stimulus and Inflation

Back in 2017, during Trump's tenure, tax cuts and relaxation of financial regulations drove U.S. stocks out of a bull market, and I made quite a profit from the bank stocks I invested in at that time. If he were to reiterate such policies this time or release signals for large-scale infrastructure stimulus, the market's expectations for "strong growth" in the U.S. economy would instantly heat up, and cyclical stocks and infrastructure-related sectors would likely welcome short-term opportunities. However, the other side of the coin is that strong stimulus will inevitably exacerbate inflation concerns, which could disrupt the Federal Reserve's monetary policy rhythm. I remember in 2018, after he publicly criticized the Fed for raising interest rates, U.S. Treasury yields fluctuated more than 10 basis points in a single day, and my long positions in dollars were forced to be urgently closed. Therefore, once he mentions intervening in the Fed's policies, we must be highly vigilant about the unusual movements in the dollar and U.S. Treasuries, as this could directly trigger a reallocation of global capital.

2. Trade Relations: The "Life and Death Game" of Sectors Under Tariff Adjustments

I still vividly remember the trade war initiated by Trump during his term. On the night he announced the increase of tariffs on China in 2019, the China-related manufacturing ETF I held lost more than 8% in a single day, while U.S. agricultural stocks also plummeted due to China's countermeasures. If this speech mentions adjustments to tariff policies for specific countries, the fluctuations in related sectors will be immediate: U.S. agricultural stocks may be under pressure due to changes in tariffs on China, while China's export-oriented manufacturing faces the risk of reduced orders. At the same time, the risk aversion sentiment in the foreign exchange market will quickly switch, and non-U.S. currencies may experience violent fluctuations, which presents both risks and opportunities for short-term traders.

3. Geopolitics: The "Seesaw Game" of Crude Oil and Gold

Geopolitics has always been a "must-watch indicator" for commodity traders, and Trump's stance often directly rewrites the pricing logic of crude oil and gold. After he announced the upgrade of sanctions against Iran in 2020, international oil prices surged by 5% in a single day, and my pre-positioned long positions in crude oil reaped substantial profits. If he sends a strong signal of support for Israel this time, the geopolitical risk premium will push oil prices up; however, if he mentions expanding domestic oil production in the U.S. or easing energy regulations, the upward space for oil prices will be suppressed. Gold is more complex, as it is driven by geopolitical risks while also contending with the strength of the dollar. Last year, when he mentioned easing tensions in the Middle East, gold fell by 2% due to a retreat in safe-haven buying.

2. Tracking Market Transmission: A "Domino Effect" Starting from the US Dollar

The impact of Trump's speech will not exist in isolation, but will spread step by step along the chain of "dollar → US stocks → commodities → global risk assets". This is a market transmission rule I have summarized over the years.

1. Foreign Exchange Market: The "Strength Switch" of the US Dollar is Controlled by Policy

The trend of the US dollar index is almost a "barometer" of Trump's policy inclination. If he signals "fiscal expansion + trade protection," it is highly likely to strengthen the dollar in the short term—expectations of fiscal expansion push up US Treasury yields, attracting cross-border capital inflows; concerns about trade frictions enhance the dollar's safe-haven property, and during the trade war in 2018, the dollar index rose in this way. Conversely, if he criticizes the dollar for being too high and harming exports, profit-taking will quickly escape, and the dollar may face a short-term correction, at which point non-dollar currencies may have a rebound opportunity.

2. US Stock Market: "Structural Opportunities" Amid Sector Divergence

Trump's policy preferences have distinct "sector labels," which I have found to be consistently reliable in practice. After he mentioned infrastructure plans in 2020, I immediately increased my holdings in construction sector ETFs, achieving over 5% returns in a single day; when he signaled tax cuts for tech companies in 2023, the semiconductor sector led the NASDAQ 100 index, and the related stocks I held gained 15%. However, if he returns to trade protectionism, tech stocks and export-oriented companies will become targets for sell-offs, and the scene of U.S. tech stocks falling due to the trade war in 2019 is still fresh in my memory. More importantly, the volatility of U.S. stocks will transmit globally, and the cyclical sectors in A-shares and tech stocks in Hong Kong often get affected by sentiment, which domestic investors must be wary of.

3. Commodity Market: The Combination of Technical Fluctuations and Policy Shocks

In addition to policy impacts, commodities also need to pay attention to technical factors. Trump's speech coincides with the roll-over of NYMEX crude oil futures, and the combination of the two may amplify oil price volatility. A similar situation occurred in 2021, where the geopolitical benefits released by the speech resonated with the roll-over effect, pushing the oil price to fluctuate more than 8% in a single day. Gold, on the other hand, needs to find a balance between "geopolitical risks" and "the strength of the dollar". Last year, I missed out on the gold hedge market because I overlooked the impact of the dollar's strength, which made me profoundly realize that commodity trading must take into account both policy aspects and technical aspects.

3. Learn from historical patterns: find "response templates" from past market trends.

Looking back at Trump's speeches during and after his term, the market has formed a clear "reaction paradigm". These historical cases are an important reference for us to formulate strategies.

In the speech during the trade war in 2018, the statement on imposing tariffs on China directly triggered a drop of more than 3% in the Shanghai Composite Index in a single day, while pushing the US Dollar Index up by 0.8%. At that time, I avoided most of the losses by reducing my positions in advance; after the infrastructure plan speech in 2020, the Dow Jones increased by 2.3% in a single day, and the construction sector ETF rose by over 5%, which is a typical policy-driven market; in the 2023 campaign policy speech, the tax reduction signal for technology companies led to a 1.5% increase in the Nasdaq 100 Index, with the semiconductor sector leading the rise. These cases all illustrate that the more critical the core issues involved in the speech, the more intense the fluctuations in asset prices. Anticipating policy direction in advance can seize the opportunity.

4. Develop a trading strategy: Capture "certain opportunities" in volatility.

In the face of market volatility driven by such policies, blindly following the trend is not advisable; "first predict, then respond" is the prudent approach. This is the experience I have summarized from countless losses.

1. Pre-layout: Build a "hedging portfolio" based on predictions.

Before the speech, I will make predictions based on Trump's past positions and recent developments. If the prediction leans towards "risk appetite," such as potential mentions of infrastructure stimulus or regulatory relaxation, I will preemptively position in U.S. cyclical stocks, long crude oil positions, and pair them with a small amount of short gold positions to hedge risks; if the prediction leans towards "risk aversion," such as potential escalation of trade friction or strong geopolitical signals, I will focus on allocating long positions in gold and U.S. dollars while reducing exposure to risk assets. In the 2023 tax cut trend for tech companies, I made a fortune by positioning in advance.

2. In-situ response: Quickly interpret signals to adjust positions

After the speech is released, it is essential to capture policy keywords immediately. If unexpected trade protection signals appear, one must decisively take profits on risk assets; in 2019, my hesitation for half an hour led to an expanded loss. If unexpected fiscal expansion benefits are released, one can increase positions in benefiting sectors, but it is important to control positions to avoid being trapped by chasing highs. At the same time, closely monitor changes in market trading volume; if trading volume increases but prices do not rise, it may be a sign that funds are taking the opportunity to sell, and one needs to exit in a timely manner.

3. Post-tracking: Be vigilant of "policy benefits turning into negatives upon realization"

The pace of policy implementation is more important than the statements made. After the speech on the infrastructure plan in 2020, I made short-term profits, but I ignored the subsequent slow progress of the legislation and ultimately gave back some of the gains. Therefore, after the speech ends, it's essential to continuously track the progress of the subsequent legislation and the signing of executive orders. If the policy implementation falls short of expectations, it is necessary to adjust positions in a timely manner to avoid being trapped by "false good news."

V. Personal Insight: Long-term patterns are more important than short-term fluctuations.

Having been in the market for many years, I deeply understand that the short-term fluctuations triggered by Trump's speeches will eventually subside, but the impact of his policy tendencies on the global economic landscape may last for years. His "America First" policy is essentially an attempt at "de-globalization". If trade protectionism persists, the global supply chain will face restructuring, and the export-oriented economies of emerging markets will be impacted; meanwhile, his interventions in the Federal Reserve may undermine the independence of monetary policy and affect the stability of global financial markets.

But from another perspective, strong stimulus policies may also drive a short-term recovery in the U.S. economy, providing growth momentum for global markets. For ordinary investors, there is no need to be led by the nose by short-term fluctuations; instead, they should focus on long-term trends and look for certainty opportunities amid policy changes. Staying calm, analyzing rationally, and adjusting strategies in a timely manner are the core secrets to dealing with this type of "verbal storm."

After all, the market is never short of black swans, but true traders can always find their own safe haven in the storm.