February 27 (Mon): Nikkei 225 (free viewing item: scenario branches)

Good morning☀

Today I’m not sure if this will get across,

but I’d like to convey an image of scenario construction.

A scenario is always“a branching”.

“The market is like shogi”

I’ve said this many times, so some of you are probably tired of hearing it.

That is how important it is.

For those who have never played shogi, it doesn’t matter what you call it—“chess,” “reversi,” or “go.”

Think of a two-player board game you play with an opponent.

You may have a favored attacking method, but

you consider the opponent’s moves to enable that attack to be executed well

and you try to link it to your strength

This“considering the opponent’s sequence of moves”is what scenario construction is.

When you “consider the opponent’s sequence,”

if they move a piece of A…

if they move a piece of B…

When A moves a piece

① It may move A to C

② It may move A to D.

If A moves to C

①-1…

①-2…

and it branches.

It is exactly the diagram I just presented.

As shown above, the scenario is constructed.

Within it, there exists paths that are called “standard lines” (joseki).

※‘Joseki’: a standard sequence generally considered best. Synonymous with theory.

There is something similar in the market.

For example, in Bollinger Bands,

when it is a “squeeze,” it becomes an expansion.

This happens with almost certainty, so you can treat it as synonymous with a joseki.

There are also other cases

When it’s a “closing state”… ○○.

When it’s a “boji”… △△.

（※This is content from “The New Bollinger Band of the Illustrated Guide,” so ??）

Therefore, within the scenario you can differentiate by how advantageous or reliable it is.

However, like shogi,

you can never have 100% certainty that you will definitely move there.

That is why we think in branches, and

people who claim otherwise are called frauds.

There isn’t a single path to take for realizing profits.

There are multiple paths, with varying degrees of profit.

Construct a scenario and decide which path to take?

Within the conceived scenario, did the actual price move occur?

（※ Only when you can conceive a scenario similar to actual price movement can you claim you’ve reached the starting point of a trader who makes money.)

Were you able to select a scenario that yields profit?

How should you think to have chosen the most profitable scenario?

If you can think like this, you will become a trader who always makes money.

Therefore, scenario construction is important.

By the way…

What is the thinking behind a trading method that uses swarm trading to hold both long and short positions?

Since both long and short positions enter, it becomes more complex than a one-way trade (long only or short only).

（※Below, market awareness is limited to members。）