"East Asia Economy ONLINE" column now published. Looking at the rising price movement, how do you think it will move afterward?
Good morning, this is Matsushita.
Currently, both the Nikkei Stock Average and the USD/JPY are
forming an uptrend with stock price strength and a weaker yen.
Look at these two daily charts,
and think about the future price movement,
how do you view it?
So far, I have conducted seminars for more than 10,000 investors,
and among them,
I have spoken with several thousand people.
From that experience, I have observed that
individual investors when they see rising prices
tend to think, “It will fall soon.”
There are many who bow to this feeling and start day trading,
which heads straight toward bankruptcy.
This kind of thinking is, as often discussed in newspapers,
a tendency of “contrarian Japanese individual investors.”
This idea is basically wrong.
In markets that are currently rising, in many cases,
an uptrend is forming,
and when an uptrend is forming,
that market tends to keep rising.
However, as Japanese individual investors think,
it may temporarily fall.
That is not the main price movement,
and in the market, this movement is called “adjustment.”
In other words, it is an adjustment to keep the upward movement in line,
and the main movement will eventually return to an uptrend.
This is the nature of the trend.
So, will the trend continue forever?
No, trends do not last forever.
However, we cannot predict exactly when the end will come.
That is why we observe the price movement before us and
once we confirm a downward movement that counteracts the uptrend,
we think, “That uptrend is over.”
Looking at prices rising,
to think, “It will fall soon” is dangerous.
Even more, avoid selling.
The current trend in front of us is the main price movement.
Do not forget that and refrain from making impulsive contrarian moves.
Stop it.
First, make solid use of the trend.
This is the way to win first.
ps
When you study cycle theory, you can also engage in contrarian moves,
but this is because you turn one theory into power.
First, use the larger force.
This is the rule of iron.
In modern terms, it is called “ironclad.”
