Good morning.Hey you?This is

In the previous article,

we talked about how, even if you know the direction of the market, that alone does not guarantee winning.

That is,

buy during an uptrend,

sell during a downtrend.

The way of thinking isn’t entirely wrong.

However, when you actually trade,

“It dropped the moment I bought.”

“After I cut the loss, it moved in the direction I expected.”

Many people have had experiences like this, I think.

I have experienced it many times as well.

So why do you lose even though the direction was correct?

One reason is

the trend does not move in a straight line.

The market repeats “move” and “pause”

Just because it’s in an uptrend doesn’t mean the price keeps rising forever.

It rises.

It pulls back a little.

It rises again.

And then it pulls back again.

The market progresses by repeating this pattern.

The same goes for downtrends.

In other words, along the course of a trend, there is almost alwaysa moment when it pauses for a brief stop.

Thus, after a period of price movement calms down, it starts moving in the previous trend direction again,

a continuation pattern

In Japanese, this is called “continuation pattern.”

I have long believed, through years of chart testing, that this market property—“it stops and then moves again”—is extremely important.

It is not about buying at the high

If you misunderstand this,

you’ll think, “In an uptrend, you should just buy no matter what.”

However, that can lead to catching the highs.

What matters is

to separate finding the trend from entering the trade.

You don’t buy just because it’s rising.

After confirming it is an uptrend,

wait for the place with a high likelihood to move next.

This act of “waiting” is extremely important.

There are times when I don’t trade for a week.

As a trader, you might think you have to trade every day.

In the past I thought so too.

But after ten years of testing, I have come to believe otherwise.

Sometimes not doing anything when there is no opportunity is also part of trading.

Not just to increase win rate

The purpose of making rules is

to

“increase win rate.”

Of course, that is one aspect.

But I think a more important point is,

to reduce unnecessary trades.

When you look at the market, every day the candlesticks move.

Therefore, it can feel like you could profit anywhere.

But if the conditions you tested aren’t all met, then it isn’t a real opportunity for me.

I don’t aim to take everything in the market.

After testing many times,

“This is a place where it is worth putting in funds.”

I wait only for those moments.

Other price movements don’t have to be taken even if they occur.

So how do you judge the moment it starts moving?

By the time you read this, you may have a question.

The trend pauses once and then moves again.

You understand the idea.

But how do you determine this on a real-time chart?

This is the difficult part.

If you look at a completed past chart,

“it rose again from here,”

everyone can see it.

But in actual trading, the chart to the right does not yet exist.

So I began to

not rely on feeling, but

to create criteria that anyone can judge in the same way.

And for that, I have spent ten years testing various methods.

Candlesticks.

Moving averages.

Various indicators.

Timeframes.

Used and discarded many times, then tested again.

That was the pattern.

What I ultimately wanted was

not a magic tool that predicts the future.

But a tool to minimize my own judgment’s bias.

From next time,

a method that even people who cannot read charts can use to judge

will be written about.

Not to predict the market, but to
reproduce my own judgments, what did I seek in the chart?

From here, I want to go a little deeper into the thinking I arrived at through ten years of testing.

So everyone, take care.

End