The market is highly volatile; considering the long-term results to determine the correct answer
I am writing this on April 5, 2025 (Saturday).
USDJPY
There was a crash on Thursday and unemployment data on Friday, so those who were holding losses on Thursday were in a state where they felt quite unwell.
In the end, there wasn’t a move that flew away due to the payroll data, though.
Friday’s movement, after breaking the Thursday low, retraced to some extent (a half-fall retracement) and ended there.
Some people probably became zero on Thursday by breaking the Thursday low.
Those who endured with averaging down or additional deposits were saved only when they managed to recover at the endunlucky peoplealso exist.
In the end, because they were saved, it’s a mistake to think that “not cutting losses was the right decision” or that “enduring with additional deposits was the right move.”
If you consider only this one instance, it may indeed be correct.
If you are not going to trade in the future, that’s fine, but many will continue to trade in the future.
Then,you should not judge correctness by a single result, but by a long-term perspectivewhich is necessary.
If you judge only by one result, there are people who think, “no matter what method you use, the result is everything; if you win, it’s correct; if you win, it’s the victory.” But this way of thinking is dangerous when you continue in the market.
He who wins is the rightful ruler, he who loses is the enemy
If you win in battle, the winner is regarded as correct, and if you lose, you are the enemy
Consider the long-term results rather than a single outcome
Why is it necessary to consider the long-term results rather than a single outcome?
Becausethe market has a high degree of randomness, and the future is unpredictable.
If you think “not cutting losses was the right decision” or “enduring with additional deposits was the right move,” you’ll end up taking the same right-hand move in a similar situation again.
However, since the market is random, the next outcome may not bail you out, and if you trade long enough, there is almost a certainty that you will encounter times when you are not saved.
Then there is a possibility that one single instance could cause an irrecoverable large loss.
“No, the market isn’t random; it can be predicted and hit correctly—that time as well, the forecast and analysis ended up as expected.”
Some may think this, but looking at a single instance, it’s just a fluke.
[New Trader × Rich Trader, Steve Burns]
Beginner Trader
“Isn’t forecasting the only profitable method?”
Wealthy Trader
“First of all, I must say that it’s impossible.
The future hasn’t happened yet, so how could you predict it?”
Quoted from ‘The Average Market Research Institute’
The Nostradamus
There is a faction that believes the market should be predicted and acted upon.
Also called a forecast dealer.
All beginners eventually belong to this faction for a while.
They believe that all market information—news, technicals, fundamentals, etc.—exists to predict the market.
All roads lead to predicting.
In other words,
making money in the market means your market prediction was correct.
This is a strong philosophy.
Reading what will happen next
If you can correctly forecast the market, you can beat the market
and they firmly believe that materials and analysis exist for that purpose.
They aim to predict the market, but many of them have never questioned whether the market can actually be predicted.
They assume predicting the market is natural and unproblematic.
They do not question that predicting is difficult and that whether the market can really be predicted is doubtful.
“The man who made 10 billion yen: Testa”
For example, people often ask, “What do you think will happen to the Nikkei average?”
But I answer by saying I won’t answer
That’s because there is no way to read it, and reading it would make you lose
Trying to predict something you can’t read and taking a position
is an action that moves you away from winning
Therefore, that question itself is odd, and I won’t answer it
that is my answer
Is there anyone in the world who can predict it?
In other words, using only lucky guesses as reference for investment is
a negative factor if you want to win
The future hasn’t happened yet, so how could you predict it?
Reading what will happen next
If you can correctly forecast the market, you can beat the market
and they firmly believe that materials and analysis exist for that purpose.
They aim to predict the market, but many of them have never questioned whether the market can actually be predicted.
There is no basis to say you can read it, and reading it would make you lose
Trying to read something that cannot be read and taking a position
is a step away from winning
Using just lucky guesses as reference for investment is
a negative factor if you want to win
Online, there were people giving advice to those holding unrealized losses and enduring them.
“What is clearly understood is that after such a big move, there’s often a move that breaks the previous day’s low the next day.
In other words, cut your losses now.”
“Let’s cut losses now.”
“If you don’t regularly cut losses, it’s difficult to do so suddenly
Such markets come many times, and those who can’t trade with loss-cutting as a given
will have all former participants disappear, so I pray you survive by learning this.”
“Those who cannot cut losses will end.”
“If you have seed money, you can try again many times.”
However, they endured the unrealized losses and were saved.
Then the person would think, “I was right not to listen to others’ advice; my own method was correct.”
There were those who continued to give advice even after they were saved.
“Also, these kinds of markets will come soon again, so I recommend you reform your trading mindset now.
The unrealized losses were saved!
There has been no one in the past who lived by thinking that way, so please survive.”
Few people will accept such advice and change.
Moreover, since this time they endured and were saved, they may come to think that ignoring others’ advice was the correct choice and that their own method was right.
Those who cannot trade with loss-cutting are the ones who all disappeared in the past
Those who cannot cut losses end here
↑ I truly believe this advice.
Fools learn from experience; sages learn from history
