Many investors and day traders are panicky these days due to the Chinese stock market. Stocks all over the world are crashing then rallying. The same goes for the currency traders. EURUSD rose 400 pips on Monday and then fell 500 pips in the next few days. GBPUSD fell 450 pips. But this Japanese day trader held his nerves. Perfectly timed his trades and made a cool $34 million. This is what he claims. He gave play by play details of his trade to his 40K twitter followers in real time.
As financial markets got crazy this week, many people turned cautious. Some were paralyzed. Not the 36-year-old day trader known by the Internet handle CIS.
“I do my best work when other people are panicking,” he said in an interview Tuesday, about an hour after winding up the biggest trade of a long career betting on stocks. He asked that his real name not be used because he’s worried about robbery or extortion. To support his claims, he shared online brokerage statements showing his trades second by second.
CIS had been shorting futures on the Nikkei 225 Stock Average since mid-August, wagering it would fall. By the market close on Monday, a paper profit of $13 million was staring him in the face. He kept building the position. When he cashed out late that night, a collapse in New York had caused his profit to double.
The lesson learned. Don’t panic when the others panic. Always manage the risk as we advocate most of the time in our posts. When the market is falling or rising, you can build positions as this Japanese day trader did while keeping the risk very low. Don’t leave the screen. The market can take a turn anytime. So when you have opened many positions, keep on watching the market and when you think the market is about to take a turn immediately close the position.
In our trading career, we have seen many a times market making a big move then suddenly reversing and moving in the opposite direction wiping our everything. Take the case of EURUSD. It rose 400 pips on that day then fell 200 pips. NZDUSD fell 500 pips on that day then immediately rallied and regained the lose ground. GBPNZD made an amzing 1600 pips rise in just 1 minute before falling 1000 pips the very next minute. So when you have luck on your side, just pounce on it and don’t lose your nerve. Close the trades when you see the market reversing. Good Luck!