Don't Let Your Love or Hate for Trump Cost You Money in the Market
Emotions and trading don't mix. A ceasefire, a follow-through day, and why your system matters more than your politics.
A buddy of mine writes a gambling column. We’ve been close for 16 years now, and he knows sports the way I know charts. Inside and out.
One Sunday I asked him if he was betting the Giants.
He looked at me like I’d lost my mind.
“I never bet my team.”
I asked him why. He’s one of the sharpest guys I know when it comes to finding an edge. If anyone could be objective about a Giants game, it would be him.
“That’s the thing,” he said. “I can’t be objective. I care too much. I’m a fan first. And fans make terrible bets.”
That conversation has stuck with me for years. Not because of football. Because of markets.
Right now the political temperature in this country is as high as we’ve ever seen it. Both sides have picked their team. Both sides are fans first.
And fans make terrible traders.
The mark of a good trader is the distance between emotion and execution. It’s the ability to look at a chart, look at the data, and make a decision based on what the market is telling you, not what you want it to say. Not what your timeline is screaming. Not what your coworkers said at lunch.
The system doesn’t care who’s president. The system doesn’t care about your politics. The system reads price and volume, and price and volume don’t have a party affiliation.
So here’s what the system is telling us right now:
Last night, April 7th, the U.S. and Iran agreed to a two-week ceasefire. The Strait of Hormuz, which carries roughly 20% of the world’s oil supply and has been effectively closed since late February, is set to reopen under Iranian military coordination. Pakistan brokered the deal. Negotiations move to Islamabad on Friday.
The market reaction was immediate. S&P futures jumped over 2%. Oil dropped from $117 to under $95 a barrel. The Nikkei surged nearly 5% overnight. The Russell popped almost 3%.
Is this the end of the conflict? No one knows. Two weeks is two weeks. Iran’s Supreme National Security Council is already calling it a “victory” while the U.S. frames it as a stepping stone. Both sides are telling different stories about the same deal. Sound familiar?
But here’s what matters for us:
Today, April 8th, we’re looking at a potential follow-through day.
For anyone new to the term, a follow-through day is one of the core signals in William O’Neil’s system for confirming that a market rally is real and not just a dead cat bounce. The rule is simple: at least four days off the bottom, then a strong up day on volume heavier than the session before. It tells you institutions are putting real money to work. We want to ride that wave.
We’re on day six of the current rally attempt. The strongest follow-through days historically come between day four and day seven. We’re right in the window.
Now, a follow-through day doesn’t mean the correction is over for good. Not every one works. But it is a signal, and it’s the signal this system uses to start building positions. O’Neil’s rule was simple: buy something. You don’t have to go all in. You don’t have to be a hero. But you initiate. You get skin in the game and let the market tell you whether to add or pull back.
A word on position sizing: It feels great to be heavy when the market is running. But being oversized is what kills you when things get choppy. If you’re maxed out, you have no room to give stocks space to breathe. You panic at the first shake. You sell what you should hold and hold what you should sell.
Start smaller than feels right. Add when the market rewards you. That’s how the best traders scale in. They earn their position size.
The bigger point is this: Whatever is happening in Iran, whatever is happening in Washington, whatever your timeline is telling you to feel about it, your job as a trader is to read the tape. Not the headline.
In business, there is no religion and there is no politics. There is what is working and what is not. Treat your trading the same way. Leave the jersey at the door.
The market doesn’t know your team. And it doesn’t care. The sooner you’re okay with that, the sooner you start making better decisions.
Ghost Alpha is a CAN SLIM practitioner documenting his trading journey in real time. This is not financial advice. It’s a system, a process, and a point of view. If it resonates, subscribe for weekly analysis.