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Hello! I'm Tejima from GogoJungle.
Investor Q&A Series!
This time,Kotsume-kkohas joined us.
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Kotsume-kko entered the world of FX in an unexpected way.
Her trading history in stocks and FX spans more than ten years.
In the previous video, Ms. Kotsume-kko also offered a free gift exclusive to viewers.
If you haven't received the gift yet, please be sure to check out this video as well.
Check Episode 1
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What is the biggest opportunity created by major market events that even beginners can win? |
Kotsume-kko, thank you again for joining us this time.
First, please share your successful trading experiences. |
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| Gogo-nyan |
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| Kotsume-kko |
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Even beginners can easily profit the most in years that have major events.
The Lehman Shock, Abe-nomics, and the COVID market are the same in that regard.
I’m happiest when I can ride a big trend. |
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| What trading strategy did you focus on in particular? |
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| Gogo-nyan |
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| Kotsume-kko |
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I think you only place trades when there is an edge in the market, that is, when it seems you can win or win big.
I monitor large players' movements while following the charts daily. |
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“Even with a 90% win rate you can still lose” The real reason—pitfalls lurking in emotions and money management— |
| What is the biggest mistake in your investment experience so far? |
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| Gogo-nyan |
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When I had just started FX, I once lost all my margin.
The cause of the failure was getting emotional during trading.
At that time there were no leverage restrictions from domestic FX firms, so I neglected money management and overestimated my method.
I constantly held positions that made my heart race, so I was up and down with wins and losses. |
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That sounds painful...
Were there other causes? |
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| Gogo-nyan |
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| Kotsume-kko |
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The reason for the loss was that when a major trend was ending and the market became volatile, I followed the trend without proper money management.
I also averaged down and left positions in limbo.
In principle, when price is volatile due to a trend reversal, you should either stay out or reduce the lot size and adopt a range-bound strategy. |
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| How much financial and psychological damage did you suffer? |
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| Gogo-nyan |
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| Kotsume-kko |
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I lost all the profits earned from major trends, and in an emotional effort to recover losses, I even lost my initial margin.
It was quite shocking, and I couldn’t eat properly for a while.
Losing the margin was one thing, but above all I lost confidence. |
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| Controlling emotions may look easy, but it’s quite difficult. Any lessons learned from that? |
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| Gogo-nyan |
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| Kotsume-kko |
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All the trades I reviewed showed thatneglecting money management can lead to losses even with a 90% win rate.
Also, I had been focusing only on short-term charts, so I realized the long-term trend is important as well. |
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Small losses, big gains! How to break free from trend dependence and see the essence of the market |
| Please tell us about your actions and measures after that. |
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| Gogo-nyan |
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| Kotsume-kko |
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I thought I finally found a good method, but looking back now, it was just trend-following.
The method works well in trends, but not in ranges or low-volatility markets.
But no one can precisely know when a trend starts or ends, when it becomes range-bound, or when a range break will occur. |
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| Kotsume-kko |
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So I went back to the points in the past where the market moved significantly, copying charts by hand and researching what happened then.
Then I used FT2, a backtesting software, to study chart patterns and researched various indicators.
Looking back, there were many things that were wasteful, but I believe many of them were useful in the end. |
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| Has your current investment style and risk management changed? |
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| Gogo-nyan |
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| Kotsume-kko |
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In markets with a lot of uncertainty, small losses and big gains are more important than the win rate for earning stable profits, and I’ve come to believe that capital management should ensure there is enough funds left to fight when big-profit opportunities come.
Also, at points where the market had previously moved a lot, there were always big players, and I realized that large funds move the market. |
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I see.
After experiencing many failures, there are many things you discover by actually doing verification work yourself.
Next time, please tell us about FX that can be done quickly in spare time for part-time traders.
Since Kotsume-kko has experience as both part-time and full-time trader, we’re extremely looking forward to it! |
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| Gogo-nyan |
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| －What interview content are you curious about－ |
| Contents |
| 01 |
| What is the biggest opportunity created by major market events that even beginners can win? |
| Contents |
| 02 |
| “The real reason you can still lose even with a 90% win rate”—pitfalls lurking in emotions and money management— |
| Contents |
| 03 |
| Small losses, big gains! How to break free from trend dependence and discern the essence of the market |
| and lots more content |
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| Second installment |
| FX to live without relying on a company—pitfalls of a 90% win rate you should know |
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| First installment |
| 【Special Video vol.01】From slow pro to trader!? Kotsume-kko's capital management and expectancy thinking |
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