“The Unhappiness of Not Knowing the Most Important Thing” A column currently published on TOYOKEIZAI ONLINE

Good morning, this is Matsushita.

The day before yesterday at Makoto Investment School,

when I was talking with a stock investor,

the basic challenges began to reveal themselves.

That is,

“How do you decide the trade size?”

That is the question.

When I asked the students, they all responded

as if they were deciding by intuition.

Hearing this, I thought that ten years ago and today,

nothing has changed at all.

I started investing in 2001,

and began to make profits from 2003.

There were several things that changed dramatically

between the times when I was losing and after I started turning a profit,

and those are also the secrets of my profits.

I have written “secret”, but

in reality this is not any secret at all,

investors who make a profit simply do it as a matter of course.

That is to reduce the trade size,

and always implement stop-losses.

Once I started money management,

my profits increased.

Individual investors may associate money management with stop-losses

or think that way, but the most important point of money management is

trading at the proper size.

Many investors know about stop-losses,

but hardly any know their own proper trade size.

Therefore, even today, about 80% of investors still lose.

In December 2004, in a conference room in Gotanda,

after twelve years of teaching investment in front of people,

I have always taught about trade size and stop-losses, but

even now investors all across Japan do not know trade size

and stop-losses.

That’s because there is no one to teach them.

Thirty-six years have passed since I started investing,

but the one person who taught me about these trade sizes and stop-losses

was only one person.

Probability-wise, that might be one in a thousand.

I am one among a thousand investors who correctly teach trade size and stop-losses.

For those who do not know about trade size and stop-losses, please learn from me quickly.

That is the secret of profits.

Regarding trade size and stop-losses,

those who do not know should learn from me as soon as possible.

That is the secret of profits.