“Published as a column on Toyo Keizai ONLINE!” Create an investment plan that doesn’t lose no matter what you do
Good morning, this is Matsushita.
In the year and a half since I began investing, I often tell the general example of beginner investors that I couldn’t win during that time,
but afterwards, I became someone who couldn’t lose no matter what I did.
If I write it like this, you might imagine money increasing infinitely and a string of winning trades,
but that is not the case at all, and even with various technical indicators,
trading ideas, and rules,
after a certain period, money will eventually increase,
that is how I learned to trade.
What you see on the internet about “never losing and growing,”
“small amounts of capital growing into huge funds with no risk,”
“easy money quickly”
is a mirage.
Actual investing and trading is not so easy or effortless as this.
However, by satisfying certain conditions,
it is possible to create “investing that never loses.”
Today, I would like to talk about how to create such an “investment that never loses.”
What is needed for “investment that never loses” is
1. The theoretical foundation that shows profits exceed losses as you continue trading
2. A capital management rule that effectively utilizes that power
3. Backtesting on past price movements and charts
4. After backtesting, small-amount live trading
That’s about it.
Let’s verify each one by one.
1: The theoretical foundation that profits exceed losses means
to know the advantageous price movements and the reasons for advantageous trades
and to surely adopt them.
In the world of investing, this is called “edge.”
This is something you just have to study.
Moreover, the problem is that the advantages discussed in the information available to us
are often shallow or not actually advantageous at all.
I also mentioned in a recent class for an investment school that
so don’t give up easily; meet something you can be convinced will win.
You must patiently study until you encounter something you can believe in.
Many investors drop out at this point.
Because they want to make money quickly,
they fall into an easy method and cannot reach the strong rationale for their own profits.
But I reached it.
For me, the theoretical strong foundation is that
“Trading is either a trend-following or a counter-trend approach.”
This is universal.
Even after 100 years, trend-following remains trend-following, and counter-trend remains counter-trend.
And both can be profitable.
Since realizing this, I have always scrutinized whether I am currently trend-following or counter-trending,
and what I am using to do so,
and have continually refined it.
And I became someone who cannot lose no matter what I do.
Next is 2.
We do not know what will happen with each individual trade,
so in this unstable and uncertain environment,
we set capital management rules to allow trading 100 times, 1000 times,
so that continuous trading is possible.
1 and 2 are a set, but
for clarity I have written them separately on purpose.
We move using the reason you won’t lose under a solid capital management.
Next is 3.
Even if 1 and 2 show good theoretical prospects,
it may still be only a wishful thinking at times.
Because there is no guarantee that adopting them will make you profits,
we confirm this through past charts and price movements.
This is called backtesting.
Practicing without confirmation would be terrifying for me.
Always confirm, and if results are off,
revise and review as many times as needed to confirm.
In practice, this step may be the longest part of the process.
When this topic of backtesting comes up, it almost always leads to
the question, “I don’t know how to perform backtesting.”
This is actually simple: create rules,
then trade according to those rules,
extract the past price movements as simulations,
and verify performance over a defined period.
I learned this not from anyone, but by thinking and practicing on my own.
Investing surprisingly progresses when you think for yourself.
Finally, 4: actual operation and trading.
Even if backtesting produced good numbers,
there is no guarantee that it will be reproduced in reality.
So we verify whether it can be confirmed,
and practice with small capital and small risk.
If profits occur as planned, you will increase capital at some point,
and if not, and losses occur first,
you examine the reasons and make revisions or adjustments.
In this way,
“investment that never loses”
is created.
After reading up to here, you may feel,
“It seems complicated and tough,” but
that is not the case at all.
Once you understand the theoretical solid foundation,
investment becomes enjoyable, and
obtaining safe capital management provides an irreplaceable sense of security.
Backtesting may seem only troublesome, but
once you start, you’ll get hooked.
In fact, I have become almost addicted to backtesting,
and participants in trading study groups say the same.
(Addiction sounds bad, but)
and then you practice in small steps.
I cannot practice what I do not understand because I am afraid.
I cannot practice what I have not confirmed myself because I am afraid.
I will never risk my precious money on things I do not understand or have not confirmed.
So I understand, confirm, and practice on a small scale.
If your investment actions are this concrete,
the “investment that never loses” for you is almost within reach.
The “investment that never loses” has meaningful purpose and practical application, so
please consider whether you will understand and implement it yourself.
ps
“What is needed to create an investment that never loses,”
1. Theoretical robust backing
2. Solid capital management
3. Backtesting
4. Practice
This is what Makoto Investment School Online
FX Investment Skills Training Course and Stock Investment Skills Training Course provide.
We still receive applications every day.
From now on, for those who truly want to acquire an “investment that never loses,”
please join from the following.
Makoto Investment School Online
