Your thoughts are unnecessary.
I am a candlestick FX trader.
There has been a large decline in stock prices.
In particular, memory-related stocks that had driven things up until now
are falling sharply.
Taking Kioxia as an example,
it once topped the market capitalization domestically in Japan.
Also, considering future memory demand and the guidance from the previous earnings,
it can still be said to be undervalued.
At the current stage, its PER is around 6x, so
it is quite undervalued.
However!
Today the stock price halved from its high.
The reasons for the drop will be justified later in many ways, but
there was no major change in Kioxia itself,
nor was there any major change in memory demand.
Even so, it fell this much.
And including the stock market and the foreign exchange market,
the market moves in this way quite often.
From a fundamentals perspective,
it seems odd for it to fall,
there hasn’t been any negative material justifying such a drop,
yet in reality it has become half its value.
I don’t know how Kioxia's price will move in the future,
but at least, compared to the market,
you should not incorporate your personal views or analysis into your trading.
Huh?
What do you mean?
Many people probably think this way.
Isn’t trading done by making various analyses and then predicting the future to buy or sell?
How can you predict without doing any analysis?
That’s what most people would think.
If we take Kioxia as an example,
the expansion of memory demand, the rise in memory prices,
the undervaluation calculated from profits,
from these analyses,
the usual result would be that Kioxia will rise further.
However, prices do not move as expected.
Even if fundamentals suggest a buy,
for example, if there are no more buyers willing to buy,
or if better opportunities are found elsewhere,
naturally Kioxia’s price will stop rising.
To put it plainly,
even if Kioxia’s price could double and still be undervalued,
assuming a ceiling of around 12–13x PER, it would be roughly like that.
On the other hand, with another stock that could rise tenfold,
you would choose that stock.
You would probably buy the stock that could rise tenfold, of course.
Furthermore, you would sell Kioxia and use that capital to buy the stock with tenfold potential.
When you think this way, even if Kioxia is undervalued and has room to rise,
the relative attractiveness of other stocks or sectors,
or factors like summer vacation, or various other factors,
could lead to Kioxia not being bought,
in other words, being sold off.
So, your analysis method isn’t necessarily wrong.
In textbook terms,
Kioxia is a value stock with growth prospects,
and there is nothing wrong with that.
However, from the price perspective,
it does not necessarily rise.
The same happened in the 2022 market as well.
Back then, shipping stocks and trading houses were bought a lot,
and high-dividend stocks in particular were bought.
Thus, growth stocks, no matter how strong the earnings,
were sold, a very irrational market.
Why do stocks get sold?
Why aren’t good earnings enough to push the price up?
Many people were troubled by this.
But if more people decide that high-dividend stocks are more attractive than growth stocks,
no matter how great the earnings,
the stock price won’t rise.
We don’t know what the exact reasoning is behind Kioxia’s decline this time, but
what is certainly true is that
the selling demand was greater than the buying demand.
This way of thinking is extremely important for trading,
and many people, unaware of this,
don’t understand why prices are falling and stubbornly think they should rise,
and even engage in averaging down.
And before they realize it, they have lost most of their capital.
The analysis results aren’t wrong,
but prices don’t move exactly as predicted.
If you don’t know this, you can’t win in the market.
It took me years to realize this.
And what’s important in trading is to simply discard your own analyses and
focus only on following the market.
Why is it going up?
Why is it going down?
That doesn’t matter.
Simply because there are more buyers, it goes up,
and when there are more sellers, it goes down.
You can’t confirm reasons with every individual trader.
Perhaps you felt you could make big money with Kioxia,
or you wanted to use it during summer vacation.
Or perhaps you found better stocks elsewhere.
There are many possible reasons, but
in any case, the number of sellers outweighed the buyers.
Don’t chase reasons;
if it’s falling, just go with it.
By doing so, you can avoid making silly predictions
and won’t need to engage in overly complex market analysis.
You will consistently hold a superior position.
And to trade without discretion,
this is the logic I currently use.
Furthermore, there is the one that aims for very large profits,
“Ten-Base FX Logic”
When there are more buyers than sellers confirmed, you buy as well,
and when there are more sellers than buyers, you sell as well,
that’s all there is to it.
And having made it possible to trade without discretion,
you can trade simply by following the rules without thinking,
maintaining a consistently advantageous position.
So, what kind of trades does this actually entail? Let’s take a look.
Here is the“Ten-Base FX Logic” trades according to the rules.
It’s about a two-hour trade,
overall yielding just under +400 pips in profit.
As you can see on the chart,
it’s clear that I am simply following the market.
What will happen to prices in the future?
There is no need to predict.
You just need to follow the market.
Conversely, there is no need to do any analysis at all.
More importantly, that very analysis can lead you to cling to a position and
become a hindrance.
No matter how much complex analysis you do,
price will not move exactly as you predict.
Even if you draw endless trendlines,
or display indicators,
these are merely your own analyses,
others may see completely different things,
and perhaps some traders don’t analyze at all and trade on emotion.
And prices move according to these trading outcomes.
If people have different analysis methods,
price cannot move exactly as any single method predicts.
One person might analyze it as a buy,
another as a sell with a different method.
And these collide to form price movements.
How to best follow the market,
and that the crowd decides everything.
Many people are not aware of this.
Day after day, people analyze with great effort,
and when prices don’t move as predicted, they look for another method.
Many people end up spending years like this.
They may think they are studying, but
unfortunately, they will never win permanently.
I can say this with certainty.
Why do prices move at all?
If you consider the mechanism behind it,
no matter how you refine your own analysis,
prices will not move exactly as predicted.
If another person trades on emotions,
prices move accordingly.
What you should focus on is how to follow the market,
that is all.
And making this a discretionary-free logic is the
“Ten-Base FX Logic”.
Furthermore, this logic uses
entries based onthree candlesticks
and exits based ontwo candlesticks,
and does not use any other knowledge or discretion.
Completelydiscretionless, it can be traded mechanically.
Several months since launch have passed, but it still yields profits.
This is not a logic that can be used only temporarily;
it uses human instincts, so it is a logic that will continue to work in the future.
Because of this, even after launch,
the market has continued to allow profits to be made smoothly.
And because of such a logic,
“Ten-Base FX Logic” has received the following comments and reviews from those who have already obtained it.
“Is it really okay to win this much?”A happy comment like this was received!
“In a mechanical way”was the title of the comment.
As this person said,
“Of course there are losses.”
But, “there is a sense of security.”
That is exactly right,“Ten-Base FX Logic”is,
a logic that follows market participants,
in other words, a logic that uses human instinct.
Therefore, even if the market changes in the future,
it remains usable in any market.
As the person also said,
in this logic, what is usedare only candlesticks.
Thus, the learning process should be possible in about an hour,
making it very simple.
Currently, those who analyze in various ways and aren’t succeeding
may be trying hard, but unfortunately,
even if you bring your own analysis method to the market,
you will never win permanently.
How to follow the market,
this method will rapidly increase your success.
So, this time I explained the recent stock price drop,
particularly memory-related stocks such as Kioxia,
how to think about it,
and how to trade with an advantage.
I’ve explained this.
If you want to trade mechanically and aim for profits,
please take a look here.
