Investor actor Shun Hirose’s Oshi! Chart Club | Chapter 1 What is a moving average anyway?

Characters in this Story

Gakushuin Chaato (Gakushuin-choa-to)

Private Wupurasu Academy Chart Club’s new member. In the past he was nicknamed “Master of the Nines” in his class, but the moment the name changed from “Arithmetic” to “Mathematics,” he heard something in himself crumble, so they say.

Hirose Shun

Chart Club captain. The school’s strong subject is “Japanese.” In his childhood, he devoured library books to earn recognition for his reading, but once he moved to junior high, he rose to the top for “Home Economics” grades and, neglecting academics, developed exceptional girl power.

*This article is a reprint and revision of FX攻略.com’s January 2019 issue. Please note that the market information stated here may differ from current market conditions.

Hello everyone! I’m Investor Actor Shun Hirose, a regular contributor to this magazine.

I’ve been entrusted with one column, so I’ve decided to serialize about my main tool and popular technical indicator: “Moving Average Big Cycle Analysis.” Like a mentor, I hope to introduce you to chart analysis in the Kojiro teacher style.

Even a long journey starts with a single step. If you study sincerely, you’ll see solid results in investing, so let’s take our time and start from the basics once more.

To make learning investing a little more enjoyable for everyone, two characters appear in this story! (In a theatrical style, we’ll present this in script form.)

Part 1: The Two Meet

Gakushuin Chaato (hereinafter “Gaku”) is here with you! I’ve come to learn investing, I’m Gakushuin Chaato! Please take care of me from now on!

Hirose Shun (hereinafter “Shun”)Welcome to the Chart Club. By the way, that’s an amazing name… that’s the so-called glitter…

Gaku: Please don’t say more!

Shun(I’m kind of mindful of it though…)

Gaku: I learned of the club’s existence when I entered this academy. Recently, investing has become popular among young people, so I’d like to start studying FX as well! Please take me as your apprentice!

ShunShunThere are many ways to study investing, and the one I specialize in is “chart analysis.” Is that OK?Even when you say you’ll study investing, there are many methods. The one I specialize in is called “chart analysis,” but is that okay?

Gaku: Huh? I don’t really get it, but that’s fine! Nice to meet you!Gaku: Huh? I don’t really understand, but that’s fine! Please take care of me!

ShunShun(He’s got a lot of momentum… I’m worried about the future)(He’s full of momentum… I’m worried about his future.)

Shun

Chart analysis uses various “technical indicators” to identify market trends and past patterns to accurately recognize the current state.

Gaku: Does that mean there are many methods?

ShunYes. There are countless, beyond count.

Gaku: …No way! I won’t be able to memorize that much!

ShunRight! The general families are limited, and they can be categorized into a few types, but if we did each one here, it would defeat the purpose of this project. So I’ll train you thoroughly so you can also use my weapon: “Moving Average Big Cycle Analysis.”

Gaku: What is the project?

ShunU-uh… never mind. Don’t worry about it.

Gaku: ?

ShunAnyway, from now on what I’ll teach is an analysis method that is characterized by being “easy to understand,” “easy to use,” and likely to lead to large profits, from beginner to advanced levels.

Gaku: I’m new to this, so it’s great if it’s easy to understand!

ShunThe name “Moving Average Big Cycle Analysis” comes from my master, and from Gakushuin’s perspective…

ShunY-yeah. Well, let’s leave that for later. From your perspective, the master’s master, Kojiro-sensei, is the one who gave the name to the analysis method, but since that’s long, we’ll shorten it here and call it “Ido-dai.” It’s also better for the magazine’s layout in terms of character count.

ShunNo problem... Don’t worry about it.

Shun(I hate sharp guesses…!) Anyway, a hundred listenings aren’t as good as one sight. Let’s first look at a diagram. Diagram 1 shows a candlestick chart of price fluctuations. It’s fairly common.

Figure 1 Source:TradingView EURUSD Chart

Gaku: The red and blue bars are wobbling.

ShunThese show price movements up and down, but as-is there isn’t much to go on for buying or selling. Traders use various technical indicators to make the price action easier to read, and what I want to introduce here is precisely “Ido-dai.” If you display Ido-dai on the chart we just looked at, like this (Figure 2)!

Figure 2 Source:TradingView EURUSD Chart

Gaku: Wow! That line is added all over!

ShunYes! This line is the major technical indicator called the “Moving Average,” basic in nature. It’s common to use multiple moving averages, an old but widely-used indicator. The version refined by Kojiro-sensei is what we call the “Ido-dai” style. Compare it to the chart you saw earlier—how does it look?

Gaku: It feels like the general flow is easier to understand!

ShunThat’s important. It’s visually easy to understand and user-friendly, so anyone can use it daily. If it’s too difficult, it doesn’t guarantee correctness just by being hard.

Gaku: Oh! Investing used to feel hard, but with this, I feel I could actually win in FX!

ShunVague confidence alone isn’t enough (laughs).

Gaku: Now! Immediately! Please impart this to me as well!

ShunWell, well, don’t rush. Start with the basics. Gradually raise the level month by month to become a proficient user of Ido-dai. Now, let’s quickly begin by learning what the “Moving Average” used in Ido-dai is.