Writer:Momoko
Appearance-wise, a普通 housewife enjoying child-raising... However, my mind is overflowing with “cells called investment,” and no one around would notice.
Blog:The ultimate secrets to increasing a housewife trader’s assets, fully disclosed.

In the previous article, as preparation before trading, rather than just looking at charts of the currencies you want to trade, you display charts representing various economic movements such as stock prices, futures, and the Dow, and each of them asks: "Why is it rising, why is it falling, or is it consolidating?"

We discussed trying to attribute a reason to all movements.Why is it going up, why is it going down, or is it a consolidation”

Then, we talked about trying to provide reasons for all movements.

Preparation 3: Always hedge risks and anticipate the future

This is the close of last week, but the Nikkei index, European stock indices, and the Dow allfell more than 3%, and the Nikkei, in particular,updated this year’s lowest value.

News of Brexit caused markets to quickly shift to risk-off mode and global stock prices dropped together. When the drop becomes this large, the reason “why it’s dropping” becomes easy to justify.

Furthermore, risks that can be anticipated now include

• “The bottom for the pound is unclear”
• “Other EU member states may engage in exits as well”
• “Nikkei’s new low, the collapse of Abenomics”
• “Global economic imbalances”

Among other things, there could be more shocking news that damages the market.There are still many potential risks to consider.

Just because the election is over does not mean we can breathe easy.

Records Become a Trader’s Ally

And now, even if just a rough idea comes to mind, I am someone who tends to forget things, so I alwayswrite these down in my blog or notebook.

The reason is that people who forget easily and are easily swayed by others—besides me, there may be others as well. Howeveras a trader, neglecting these weaknesses will eventually lead to painful consequences.

What this means is, suppose in the future “there was a big drop, so a short-term buying spree begins.”

What would people think at that moment?

“Well, it dropped so much, but now it’s going back up. Since it dropped so much, I’ll buy too. After all, the election is over and the market has regained some stability.Perhaps we’re entering a buying phase after such a long decline?””

But as noted above, the market risks that can be anticipated in the future have not disappeared; they exist even if you can’t see them yet, and when a slight looseness in the market occurs,they drop again all at once.

At that moment, traders who had prepared in advance to “anticipate risks” can respond instantly, while traders who can only see what’s in front of them become prey.

In such moves, this year we often saw them related to OPEC or, at the start of the year, movements related to China.

Risks are things that strike when you’ve almost forgotten about them.

As traders who trade while considering fundamentals,

“an analysis that anticipates ahead, not just what’s in front of you”

“a strong mindset that isn’t swayed by what’s in front of you”

are what I want to maintain in daily trading! It’s hard not to be swayed by those around you, and of course I still have many challenges myself.