Active FX traders discuss with the talked-about person in a Trader’s dialogue | Guest: Yasushi Yamanaka, Part 2 [Traders Securities Minna no FX Iguchi Yoshio]

Profile of Yasushi Yamanaka

Joined Bank of America in 1982, became vice president in 1989, and proprietary manager in 1993. Joined Nikko Securities in 1997, and in 1999 served as Deputy General Manager of the Foreign Exchange Fund Department at Nikko City Trust Bank. In 2002, established Ascendant, serving as a director.

Official Site:Ascendant/Yamanaka Yasushi provides a foreign exchange information distribution site

Twitter:https://twitter.com/yasujiy

Profile of Yoshio Iguchi

Iguchi, Yoshio. Trading Desk, Market Department, Traders Securities. Certified Technical Analyst. Since 1998, has been engaged in financial institutions, primarily involved in coverage-dient trading focusing on commodities markets such as precious metals and petroleum products. Since 2009, has been with Minna no FX, conducting trading operations focusing on USD/JPY and major European currencies. Proficient in fundamental currency analysis and also well-regarded for short-term forecasts using technical analysis. Recently appeared at Minna no FX's free online seminars, which have been well received for their easy-to-understand content. Furthermore, on Twitter, professional dealers give real-time opinions on the market, so it’s a must-check.

Twitter:https://twitter.com/yoshi_igu

*This article is a reproduction and editing of an article from FX攻略.com July 2020 issue. Please note that the market information written in the main text may differ from the current market.

【Link to the previous part】

・Trader’s Dialogue with a Current FX Dealer About a Notable Person — Part 1 [Traders Securities Minna no FX Iguchi Yoshio]

Stop trading during major market swings

IguchiAs of March 19, 2020, markets were volatile due to the coronavirus outbreak. How should one respond to such large market moves?

YamanakaThere is a saying, “Take a break; the market will wait.” Do not push yourself. If the market moves in a direction different from your expectations, admit you were wrong and stop. Keeping averaging down after admitting a mistake is the worst pattern. If you are wrong, acknowledge it, stop, forget it, and move on. Also, understand what is happening in the market and why it is moving.

The current market situation is simple. The outbreak began in China, the world’s factory, leading to disruptions in global supply chains centered in China, followed by disruptions in human movement. When neither goods nor people move, nothing you do will work, so now is a time to endure. Countries are implementing economic measures, but improvement will not come quickly.

This novel coronavirus has more infections than the SARS outbreak a few years ago, yet early markets were optimistic, so even when NY Dow peaked in February, I kept saying, “Do not buy stocks with baseless optimism.” Yet prices continued to rise until mid-February, which was puzzling. Now pessimism is spreading. However, there is a market adage that “a bull market is born out of pessimism.” Could we be near such a condition now? And the most shocking thing was the Federal Reserve cutting rates effectively to zero. This suggests that “corporations may go bankrupt, so prepare.” Such a zero cut is rare. In such a situation, one should not trade.

IguchiNow is not the time to trade.