Non-computational calculation (1)

Following the rules is difficult, and proper application is a thorny path as well.

In an old manga I read, I think it was the work by Tatsuhiko Yamagami, the author of Gaki Deka, where a group of men who can’t cook gather to make chirashi sushi, and as they read the recipe together and proceed in a comical rush, they have raw shiitake prepared, yet it says to “soak dried shiitake in water”… the part where they hurry up to the roof to dry the shiitake remains etched in my memory even now.

In the Chugen-sen (Midline) Positioning Method, trend determination and the three-part division of buys and sells are specified.

It is so-called “mechanical trading,” so after setting parameters and selecting the instrument, the core practice is to avoid bringing human intuition into it.

However, in the original text of the Midline Positioning Method, the New Edition, it also touches on how to use it in practical applications and states that one should consider applying it.

First, the “Part Two Main Text,” which describes the rules, states the following:

“When Yin-Yang turns, even if you have 2/3 of the positions built according to the regulations, you must not exceed 3/3 positions.”

Positioning is normally done in three equal parts, placing 1/3 each, but depending on the situation, it is prescribed to initially build 2 units (2/3). This rule is a uniquely satisfying aspect for human intuition, anchoring a very understated position management while incorporating a sense of market participation and human-like behavior.

However, it is explicitly stated that “3/3” is the upper limit without exception.

Getting excited and loosening the rules you set yourself, letting the “offense” become too strong, is a common market pitfall and the root of major failures, so this is a very important concept.

By contrast, the “Part Four Practical Use and Experiments” introduces examples like the following.

“Account A follows the Midline regulations, but Account B uses the Midline as an aid and conducts parallel trades. For example, Account B places positions when its market view aligns with the Midline to secure profits as a hedge.”

(Summary quotation)

If bending the rules increases profitability without increasing risk, the rules themselves should be changed. Otherwise, the rules become meaningless, and one ends up trading merely by impulse, as and when the moment dictates. That is the principle.

Other general system traders would likely think the same way.

However, to master the Midline with an extremely simple rule as a tool, there are ways to incorporate discretionary judgment as described above. It is truly fascinating and exciting, but if you tackle it head-on, it could be chaotic.

So what procedures are needed, and what mindset is indispensable—answering these questions is the aim of the new book“Introduction to the Introduction: Midline Investment Method”.

As a result, I believe the book has become a substantial read in its own right, worthwhile for thinking about the market itself.

Pre-orders with “free shipping” are available until 11:00 a.m. on February 24, and shipments will go out in a mass distribution the same day in the afternoon.