8 ms·

Mystery Man Who Moves Japanese Markets Made More Than 1M Trades

87 points by ra 12y ago

VexXtreme 12y ago
Most Japanese day traders are ex-pachinko players, i.e. degenerate gamblers. Nothing to see here.
- _random_ 12y ago
  But day trading is gambling. Also degenerates don't make money.
ersii 12y ago
If you're generally interested in asset trading and came looking at this story for lessons to learn, these are the two I found in the story: * Cut your losses quickly and with determination, while you should let your winners run as long as possible. * Buy stocks that is being bought. Sell stocks that are being sold. (In other words, keep track of the stock order flow. Bid/asks). Feel free to complement this, if I missed anything. In general an interesting read/story.
- pumpkinattwelve 12y ago
  This was pure gambling. Unless he statistically did the sums (nothing mentioned in the article), this was pure and simple gambling (probably going off candlestick trading which is big in Japan). In the finance world, this is also called dumb money. Remember kids, there are two types of traders: 1. Quants 2. Gamblers Know which one you are.
  - _random_ 12y ago
    3. The ones who use inside information.
  - doctorKrieger 12y ago
    but he makes money doesn't he? Anyways can you throw in some valuable quant-related resources?
  - antr 12y ago
    From your generalisation we can then say that LTCM falls under "Quants", and Warren Buffet under "Gamblers".
    - seanmcdirmid 12y ago
      Warren buffet is definitely a quant (he does his homework) even if he doesn't use heavy duty math (though I'm sure he has access to that).
      - antr 12y ago
        Then you are using the wrong term. Value investors (those who use models such as DCF and DDM) are not considered 'quants' in the investment community. My point is, quants can be speculators too (and more often than not they are). I just wanted to point out (in a somewhat pedantic manner) that the above comment is just a random comment, without any substance.
  - ramblerman 12y ago
    Put lipstick on a pig it's still a pig. Gamblers come in various forms, some like the thrill, some make informed wagers and some use inside information. Not sure what makes a 'Quant' so different.
- nandemo 12y ago
  > Buy stocks that is being bought. Sell stocks that are being sold. Except that he first made his fortune by buying stocks that were being sold (due to an error of the other side, but still being sold).
- qznc 12y ago
  > Cut your losses quickly and with determination, while you should let your winners run as long as possible. Yes. You can also learn this from playing Poker. Science even has a name for the inverse behavior: Disposition effect. > Buy stocks that is being bought. Sell stocks that are being sold. (In other words, keep track of the stock order flow. Bid/asks). And this is way I stopped doing this. It takes a lot of time and you feel guilty whenever you are not looking. Many people may know this effect from Facebook or Twitter. Consider it much worse, when you have a lot of money at stake.
- asdfologist 12y ago
  The best advice for non-professionals is to simply not trade. Taking commissions into account, your expected excess return is negative, i.e. you'll better off just going long on some index fund. All the advice being thrown around at laymen on stock trading are nothing more than empty platitudes that have not been empirically shown to consistently work. Keep in mind that when you're playing the markets, you're competing against institutional investors and hedge funds that have far superior resources (data, algorithms, etc) to better analyze the market and to even move the market in a direction favorable to their holdings (e.g. Warren Buffet). The most likely outcome of trading is that you'll get out-gamed by these sophisticated investors.
  - gchokov 12y ago
    There are a lot of studies and theories which can help you to outperform professionals. There are also a lot of examples on amateurs doing much better than professionals. You can check "Random walk down Wall Street" if you are interested on this matter.
    - mistermann 12y ago
      Also if you know where to look (twitter, forums), you can find plenty of amateurs that outperform the market, and post their trades publicly.
      - mtrimpe 12y ago
        Just like you can find plenty of people who toss heads more often than tails.
        mistermann 12y ago
        Do you care that you might be quite uninformed on this particular matter?
    - jeffreyrogers 12y ago
      Right, but those aren't for day traders. Most of those strategies depend on holding for long periods of time.
- downandout 12y ago
  >Buy stocks that is being bought. Sell stocks that are being sold. (In other words, keep track of the stock order flow. Bid/asks). This is one of the most overlooked things in trading when it comes to non-professionals. Not all price shifts are created equal. Watching the order flow, especially the volume of trades at each price, is far more informative than simply looking at price shifts. A few small trades at a lower price does not necessarily make a trend.
- deleted 12y ago
  [deleted]
- leoh 12y ago
  What would you say is the best source for these data?
JacobAldridge 12y ago
Single page - http://www.businessweek.com/printer/articles/818014?type=bloomberg http://www.businessweek.com/printer/articles/818014?type=blo...
fdsary 12y ago
How can we make this title a complete aliteration?
- JacobAldridge 12y ago
  Moments Matter: Marvelous Mystery Man Makes Movements, Moves Markets, Multiplies Millions. Maybe.
- _random_ 12y ago
  Well, Nippon is better than Japan, but still not good enough. Minamoto is too specific. We will have to live with this.
rurounijones 12y ago
"he owns two apartment buildings, the larger of which—a modernist cube in central Tokyo with a French bar on the ground floor" Hmm, that information seems a little too identifying.
- seanmcdirmid 12y ago
  Not for Tokyo.
  - thret 12y ago
    Street addresses barely qualify as identifying in Tokyo.
Tycho 12y ago
BBC recently ran a two part documentary about traders and day-traders. It was called Millions By The Minute. It was quite entertaining (not very informative though).
thirdtruck 12y ago
Reminds me of a Ghost in the Shell plot, where one man wrote software that dominates the Japanese market. I'd make a joke, but that would fall into spoiler territory.
Humjob 12y ago
It's incredibly difficult in the long run to make money by day trading. You need to be in the top 20% of trading ability to just break even (meaning, 80% of people who day trade outright lose money) and among the top 2-3% of traders if you want to make any substantial profits. I personally take Charlie Munger's approach of going long a US equity index with most of my money and then using leftover funds to exploit what I perceive as structural mispricings in different asset classes/financial markets that I think will correct themselves in the short/medium term. Bitcoins, for example, have been a fun ride since I bought some at the start of 2013. See this study on day traders for more info: http://faculty.haas.berkeley.edu/odean/papers/Day%20Traders/Day%20Trade%20040330.pdf http://faculty.haas.berkeley.edu/odean/papers/Day%20Traders/...
leoh 12y ago
For the curious, here is the Japanese Wikipedia page about cis which the article mentions: http://ja.wikipedia.org/wiki/Cis_(%E6%8A%95%E8%B3%87%E5%AE%B6) http://ja.wikipedia.org/wiki/Cis_(%E6%8A%95%E8%B3%87%E5%AE%B...
greeneggs 12y ago
I don't know if day trading and currency trading are more common in Japan than other countries, but low interest rates certainly encourage gambling. Here are two more articles on Japanese amateur currency traders and day traders: [1] http://www.nytimes.com/2007/09/16/business/worldbusiness/16housewives.html http://www.nytimes.com/2007/09/16/business/worldbusiness/16h... [2] http://www.nytimes.com/2006/02/19/business/yourmoney/19day.html http://www.nytimes.com/2006/02/19/business/yourmoney/19day.h...

87 points by ra 12y ago

VexXtreme 12y ago

Most Japanese day traders are ex-pachinko players, i.e. degenerate gamblers. Nothing to see here.

_random_ 12y ago
But day trading is gambling. Also degenerates don't make money.

ersii 12y ago

If you're generally interested in asset trading and came looking at this story for lessons to learn, these are the two I found in the story: * Cut your losses quickly and with determination, while you should let your winners run as long as possible. * Buy stocks that is being bought. Sell stocks that are being sold. (In other words, keep track of the stock order flow. Bid/asks). Feel free to complement this, if I missed anything. In general an interesting read/story.

pumpkinattwelve 12y ago
This was pure gambling. Unless he statistically did the sums (nothing mentioned in the article), this was pure and simple gambling (probably going off candlestick trading which is big in Japan). In the finance world, this is also called dumb money. Remember kids, there are two types of traders: 1. Quants 2. Gamblers Know which one you are.
- _random_ 12y ago
  3. The ones who use inside information.
- doctorKrieger 12y ago
  but he makes money doesn't he? Anyways can you throw in some valuable quant-related resources?
- antr 12y ago
  From your generalisation we can then say that LTCM falls under "Quants", and Warren Buffet under "Gamblers".
  - seanmcdirmid 12y ago
    Warren buffet is definitely a quant (he does his homework) even if he doesn't use heavy duty math (though I'm sure he has access to that).
    - antr 12y ago
      Then you are using the wrong term. Value investors (those who use models such as DCF and DDM) are not considered 'quants' in the investment community. My point is, quants can be speculators too (and more often than not they are). I just wanted to point out (in a somewhat pedantic manner) that the above comment is just a random comment, without any substance.
- ramblerman 12y ago
  Put lipstick on a pig it's still a pig. Gamblers come in various forms, some like the thrill, some make informed wagers and some use inside information. Not sure what makes a 'Quant' so different.
nandemo 12y ago
> Buy stocks that is being bought. Sell stocks that are being sold. Except that he first made his fortune by buying stocks that were being sold (due to an error of the other side, but still being sold).
qznc 12y ago
> Cut your losses quickly and with determination, while you should let your winners run as long as possible. Yes. You can also learn this from playing Poker. Science even has a name for the inverse behavior: Disposition effect. > Buy stocks that is being bought. Sell stocks that are being sold. (In other words, keep track of the stock order flow. Bid/asks). And this is way I stopped doing this. It takes a lot of time and you feel guilty whenever you are not looking. Many people may know this effect from Facebook or Twitter. Consider it much worse, when you have a lot of money at stake.
asdfologist 12y ago
The best advice for non-professionals is to simply not trade. Taking commissions into account, your expected excess return is negative, i.e. you'll better off just going long on some index fund. All the advice being thrown around at laymen on stock trading are nothing more than empty platitudes that have not been empirically shown to consistently work. Keep in mind that when you're playing the markets, you're competing against institutional investors and hedge funds that have far superior resources (data, algorithms, etc) to better analyze the market and to even move the market in a direction favorable to their holdings (e.g. Warren Buffet). The most likely outcome of trading is that you'll get out-gamed by these sophisticated investors.
- gchokov 12y ago
  There are a lot of studies and theories which can help you to outperform professionals. There are also a lot of examples on amateurs doing much better than professionals. You can check "Random walk down Wall Street" if you are interested on this matter.
  - mistermann 12y ago
    Also if you know where to look (twitter, forums), you can find plenty of amateurs that outperform the market, and post their trades publicly.
    - mtrimpe 12y ago
      Just like you can find plenty of people who toss heads more often than tails.
      - mistermann 12y ago
        Do you care that you might be quite uninformed on this particular matter?
  - jeffreyrogers 12y ago
    Right, but those aren't for day traders. Most of those strategies depend on holding for long periods of time.
downandout 12y ago
>Buy stocks that is being bought. Sell stocks that are being sold. (In other words, keep track of the stock order flow. Bid/asks). This is one of the most overlooked things in trading when it comes to non-professionals. Not all price shifts are created equal. Watching the order flow, especially the volume of trades at each price, is far more informative than simply looking at price shifts. A few small trades at a lower price does not necessarily make a trend.
deleted 12y ago
[deleted]
leoh 12y ago
What would you say is the best source for these data?

JacobAldridge 12y ago

Single page - http://www.businessweek.com/printer/articles/818014?type=bloomberg http://www.businessweek.com/printer/articles/818014?type=blo...

fdsary 12y ago

How can we make this title a complete aliteration?

JacobAldridge 12y ago
Moments Matter: Marvelous Mystery Man Makes Movements, Moves Markets, Multiplies Millions. Maybe.
_random_ 12y ago
Well, Nippon is better than Japan, but still not good enough. Minamoto is too specific. We will have to live with this.

rurounijones 12y ago

"he owns two apartment buildings, the larger of which—a modernist cube in central Tokyo with a French bar on the ground floor" Hmm, that information seems a little too identifying.

seanmcdirmid 12y ago
Not for Tokyo.
- thret 12y ago
  Street addresses barely qualify as identifying in Tokyo.

Tycho 12y ago

BBC recently ran a two part documentary about traders and day-traders. It was called Millions By The Minute. It was quite entertaining (not very informative though).

thirdtruck 12y ago

Reminds me of a Ghost in the Shell plot, where one man wrote software that dominates the Japanese market. I'd make a joke, but that would fall into spoiler territory.

Humjob 12y ago

It's incredibly difficult in the long run to make money by day trading. You need to be in the top 20% of trading ability to just break even (meaning, 80% of people who day trade outright lose money) and among the top 2-3% of traders if you want to make any substantial profits. I personally take Charlie Munger's approach of going long a US equity index with most of my money and then using leftover funds to exploit what I perceive as structural mispricings in different asset classes/financial markets that I think will correct themselves in the short/medium term. Bitcoins, for example, have been a fun ride since I bought some at the start of 2013. See this study on day traders for more info: http://faculty.haas.berkeley.edu/odean/papers/Day%20Traders/Day%20Trade%20040330.pdf http://faculty.haas.berkeley.edu/odean/papers/Day%20Traders/...

leoh 12y ago

For the curious, here is the Japanese Wikipedia page about cis which the article mentions: http://ja.wikipedia.org/wiki/Cis_(%E6%8A%95%E8%B3%87%E5%AE%B6) http://ja.wikipedia.org/wiki/Cis_(%E6%8A%95%E8%B3%87%E5%AE%B...

greeneggs 12y ago

I don't know if day trading and currency trading are more common in Japan than other countries, but low interest rates certainly encourage gambling. Here are two more articles on Japanese amateur currency traders and day traders: [1] http://www.nytimes.com/2007/09/16/business/worldbusiness/16housewives.html http://www.nytimes.com/2007/09/16/business/worldbusiness/16h... [2] http://www.nytimes.com/2006/02/19/business/yourmoney/19day.html http://www.nytimes.com/2006/02/19/business/yourmoney/19day.h...