“A column now published on Toyo Keizai ONLINE” The most stable ideal form of trading

Good morning, this is Matsushita.

Yesterday's U.S. market was,

closed for Presidents' Day.

USD/JPY continued to rise into the upper 106 yen range.

In this stock market crash,

I think many stock investors must have realized

that “preparation for a fall is necessary.”

As for the notable decline in the Nikkei Stock Average,

it was the decline not seen since the stock slump caused by concerns over China and emerging markets

from the latter half of 2015 to 2016,

and we had been in a relatively calm, stable market with no notable drops for about two years.

Last October there was the first-ever 16 consecutive days of gains,

and in November there was the 16-year high in closing prices,

great things were happening, and the mood warmed,

and the sense of a drop became weak, I think.

A sharp drop or crash happens precisely because market participants do not imagine it.

What goes up will eventually go down.

This is also the market's truth, so

even if the U.S. and Japanese stock markets stabilize and make new highs in the future,

we should prepare for declines.

With that in mind,

no matter when something happens,

the most stable form of investing that consistently aims for profits

is to be able to profit both from buying and from selling.

That is the trading strategy and style we are talking about.

In this regard, the FX market and commodity markets

can build trades from selling without resistance.

However, in the stock market,

the buying bias is strong,

and with the real economy currently strong and in a long uptrend,

it becomes difficult to construct selling trades.

But someday a crash could become the trigger,

and in the following years, or in some cases decades,

a downtrend could continue,

which we must consider.

In that sense, when the market is stable is precisely when

in a downtrend market where pessimism and despair swirl around,

we should prepare to trade from the selling side.

It will bring even greater psychological and capital stability.

It will become even more stable in mind and funds than today.