A serious pro teaches as gently as possible to the limit! Takami Murai's Systematic Trading Introduction | ⑤ Why method alone can't guarantee victory

This is a beginner-friendly course on system trading for everyone, led by Takami Mura i (Murai Takayoshi?) and his staff member Ryuma Yoshida, who are well-known as pioneers in system trading. The final fifth installment's theme is “Why methods alone cannot guarantee wins.”

*This article is a reprint and revised edition of an article from FX攻略.com December 2018 issue. Please note that the market information described in the main text differs from the current market.

Profile of Takayoshi Murai

Murai Takayoshi. President and director of the General Incorporated Association Japan Trader Coaching Association, CEO of Excellent Horse, and principal of the Super Trading School REED. A leading figure in “NLP Trading,” which teaches modeling methods of top traders worldwide based on NLP psychology, and an active system trader. A coach who specializes in traders and a guide for investment methods, active nationwide. Currently, he trains coaches who provide high-level skills to individual investors in Japan and engages in writing, lectures, and seminars. Certified Technical Analyst (CMTA) by the NPO Japan Technical Analysts Association and Master Practitioner certified by the U.S. NLP Association.

Profile of Ryuma Yoshida

Yoshida Ryuma. In 2013, after taking Murai Takayoshi’s “NLP Trader Coaching” course, he succeeded in turning his lifetime performance profitable. In November 2016, moved from Chiba to Fukui in alignment with Murai’s philosophy and passion for trader education, and joined the staff of the Super Trading School REED. A current system trader with 11 years of trading experience. Markets he handles include Nikkei 225 futures, FX, commodities, and cryptocurrencies, among others.

Do you understand the method deeply?

YoshidaThe theme this time is, “Why can’t you win with just the method?” But is it really difficult to profit in FX just by knowing a superb method?

MuraiHaving a method that is inherently excellent, specifically with statistical edge, is, of course, very important. We’ve explained in this series how verification is crucial to constructing such methods.

However, it is also important to consider whether you have “fully made it your own.”

YoshidaWhat does it mean to “make it your own”?

MuraiIt means understanding the entire method.

First, in all investing, not only FX, there is no 100% win rate. No matter how excellent a method is, you win and lose. Conversely, even if you cannot predict the outcome of a single trade, by repeating it hundreds of times, you should be able to grow your total money with a good method. This is one of the meanings of having a method.

YoshidaEven if you apply a good method in practice, losses still happen, right?

MuraiYes, that’s right. If you properly understand the method, even if losses accumulate a bit and your assets dip, you won’t be mentally destabilized.

If you have data from backtesting, you’ll know the method’s win rate and maximum consecutive losses, right? This is one meaning of possessing the method.

YoshidaEven with the same loss, if it’s within expected loss, there’s no need to panic.

MuraiAlso, there is meaning in understanding the background of the method. System trading is mainly based on technical analysis, but understanding why you base decisions on that technical indicator and under what market conditions you buy or sell allows you to trade with confidence.

Conversely, if you adopt a method learned from someone else without sufficiently scrutinizing it, you’ll lack trust and understanding, and you’ll quit as soon as things go a little off.

YoshidaSo, even for someone else’s developed method, you should understand the method as well as its creator, right?

MuraiI believe so. It’s a psychological matter, but the key is whether you have conviction or not.