What to learn from a market adept

This is from the era when individual stock enthusiasts exchanged information at securities firms’ over-the-counter counters.

Among regular customers, there was always someone who was highly respected, and it was common to see other individual investors jump on the same stock, that is, give a signal (Chōchin).

Because there were no strict rules at the time, each staff member acted with self-control, but when someone said, “Mr. XX is buying this,” and as long as the person didn’t complain, the signal could be whispered to other investors if it didn’t get in the way—a decision based not on a manual but on “principle of ethics.”

Now, what happens if you signal the masterful trader who consistently makes profits?

People do it hoping it will be easy money, but it doesn’t work that way.

For example, if you jumped in when the master made a test move, there was a later cheaper moment that made you regret it and you sold. Then the master would begin rising again and buy a lot, making a huge profit… Ah, how frustrating...

Or, if you signaled a master who is hitting it big and in top form, you’d be sunk after a rare miss… the master would have spewed out part of previous profits and moved on to the next stock, while you would have drastically reduced your funds… This is also the “market reality.”

“From the time I was called a master, I started to bend.”

Everyone considers stocks that are “excellent” to have already hit the peak, or when a fund that performed well last year performs poorly this year, in other words, Murphy’s Law tends to apply.

Even the true masters have many misjudgments, both hits and misses, and while it’s bad to jump on easily, if you are living alongside that master, you can learn fundamental ways of thinking and various responses—valuable basics.

If you signal in a manner that’s close to this, it can be beneficial; otherwise, you’ll merely pick up bad habits.

What about mechanical trading methods like the Chūgen-sen (Midline) approach?

If you have the image that “follow these steps and you’ll profit,” you might end up going in the same direction as the signalists who adopt a light, casual approach. But if you follow it to learn the “form,” you can expect effects similar to becoming a student of a master.

The book “Chūgen-sen Positioning Method” shows a way to get used to the first deployment, so I’ll introduce that.

As you decide the starting point for riding the waves of the market, it is good to begin by deploying as soon as the Chūgen-sen turns, in order to train your own sense.

(omitted)

• Carry out the same number of times, several times
• As soon as the fees disappear, look for a place to exit (exiting too late is worse than too early. Once you’re used to it, gradually make it later)
• If after execution you think “it could be a bluff,” cut immediately
• However, never refrain from deploying just because you think “this time I will fail.” Always deploy the same amount

(Quoted from “New Edition: Chūgen-sen Positioning Method,” Part 4: Practice and Experiment)

First, define the moments when you should deploy, when it is your turn, as the Yin-Yang turning of the Chūgen-sen

Do not imagine inconceivable results; when the conditions align, you decide to deploy

The ultimate goal is to “use the Chūgen-sen as a tool with your own will,” but first, when the form is established, deploy and feel the “form” of the Chūgen-sen

However, you should also write that you should exit quickly.

Do not hesitate to close the position with your own will.

Some people protest, “In the age of science, are you going to practice such old-fashioned training?”

But the process of confirming various things through steady repetitive practice is precisely a scientifically explainable and correct approach, isn’t it?