Position to initiate "starting point"
The “Starting Point” to Initiate a Position
A trade is one complete cycle of “initiation → position management → exit.”
To consider this sequence of actions, first turn your attention to the “start of initiation.” The following is a quotation from the Chūgen-sen book.
- How to begin from a trial order — buy (or sell) for trial, determine if you can ride the wave, then place the main order
- How to begin from a spread-building order — for stocks, a method to reduce cost; for commodities, begin from a near-term buy and far-term sell to ride the wave
- A method to determine a standardized starting point — decide a starting point based on statistical probability from analysis of indices and candlesticks, then ride the wave afterward
(From the first part of “New Edition: The Chūgen-sen Positioning Method” commentary)
The “start of initiation” in the Chūgen-sen method is “three.” Since it is a mechanical way to judge price movements, you simply need to memorize the rules. However, there are many things you won’t understand until you actually experience it, so getting used to the Chūgen-sen method is the first step. In experiments and practice trades with limited quantities, you must absolutely experience the launching of initiation.
Again, a quote from the Chūgen-sen book.
When you decide the starting point for riding the market waves, it is also wise to train your own senses by first actively engaging when the Chūgen-sen turns and starts moving.
(omitted)
- Repeat the same number of units several times
Look for a selling opportunity as soon as the fees are cleared
(Profit-taking should be earlier rather than later. Once you are accustomed, gradually allow for later exits) - After executing, if you think “this might be a false move,” cut immediately
However, it is absolutely wrong to refrain from engaging just because you think “this time will fail.” Always engage with the same number of units
(Quote from “New Edition: The Chūgen-sen Positioning Method” Part Four: Practice and Experiment)
When your own initiation conditions are met, you must absolutely act.
If you think, “The conditions are met, but the current situation is…,” you’ll only complicate matters by adding conditions on a whim.
If you refrain from initiating because you feel uneasy, and that turns out to be correct, you’re wrong. You should initiate as planned and accept the losses. If a certain degree of unease has a consistent probability or you can be highly convinced, you must add that to the rule and adjust the “start of initiation.”
The fundamental principle of initiation is not to fixate on a single target with a definite bet.
Just as you “consult” on price movement, the principle is to plan and divide your moves.
Even though “planning” implies discretion, there will be considerable discretion in position management. Nevertheless, choosing the timing to initiate is extremely important.
If you hesitate at this stage, it will become “unplanned, loose trading” rather than “planned trading.” It is a crucial theme to always consider.
In the November 14 broadcast, we focused on this “start of initiation.”
Together with the follow-up blog, please take a look.
Episode 96 Market Scramble
“The Entry Point for Trading in the Wave”
～Criteria for Starting to Take a Position～
