We All Need Inspiration
Everyone needs to find inspiration from somewhere and traders are no
different. I spend a lot of time studying other traders, not just to try to
find out how they trade, but to find some general inspiration. This is the
first article in what I plan to be a whole series article about great traders.
Some of the most famous traders in the world like Jesse Livermore, Oliver
Kell, Mark Minervini and others are all on the list. But I will start with a
lesser know trader know by the pseudonym CIS.
CIS is one of a few Japanese traders who have become legendary. Known for
his astounding success and unique trading strategies, CIS has carved out a
remarkable career in the financial markets. Starting with a modest sum, he
managed to turn his initial capital of ¥3 million into a staggering fortune
exceeding ¥20 billion (approximately $200 million).
Although his real name is known, I have chosen to stick to calling him CIS
since he prefers it and values his privacy. And that is something I can relate to;
I am also keeping me real name a secret to protect my privacy. Many successful
traders have stepped into the spotlight, especially on social media, and
regretted it.
Early Life and Entry into Trading
CIS began trading in the late 1990’s. Before becoming a professional trader
he worked as systems engineer. As an engineer he would have had a sound
mathematical education, and I would imagine, an analytical mind. His starting
capital was ¥3 million which would have been around $25,000 at that time.
His early trading years were marked by a focus on day trading and short-term
trading, where he capitalized on the rapid price movements of stocks.
Leveraging his analytical skills, he quickly adapted to the fast-paced nature
of the markets, developing a keen sense for market trends and trading
opportunities.
The Road to Success
CIS's rise to prominence was not without challenges. The early 2000s
presented a volatile market environment, with the dot-com bubble burst and
various economic uncertainties. However, these conditions also offered numerous
opportunities for a savvy trader like CIS.
Dot-Com Bubble Burst
The dot-com bubble burst in 2000 caused widespread panic and significant
market downturns. While many investors suffered substantial losses, CIS saw
potential in the chaos. By focusing on stocks that were oversold during the
panic, he managed to buy at low prices and profit from subsequent recoveries.
His ability to remain calm and analytical during market turmoil was a key
factor in his early success.
Livedoor Shock
In January 2006, the Livedoor scandal rocked the Japanese stock market. The
internet company was raided by authorities on suspicion of securities fraud,
leading to a massive sell-off. CIS, like BNF, recognized the market
overreaction and bought shares during the panic. As the market stabilized, he
sold his shares for significant profits, further bolstering his reputation as a
master trader.
Financial Crisis of 2008
The global financial crisis of 2008 was another critical period for CIS.
While the crisis caused widespread fear and uncertainty, it also created
opportunities for those who could navigate the volatile conditions. CIS's
strategic approach and ability to manage risk allowed him to profit even during
one of the most challenging periods in financial history.
Trading Strategies and Techniques
CIS's trading strategies are a blend of technical analysis, market
psychology, and disciplined risk management. Here are some key components of his approach:
Technical Analysis
Moving Averages: CIS used moving averages to identify trends and potential
entry points. Short-term moving averages crossing above longer-term moving
averages were seen as bullish signals, while the reverse indicated bearish
trends.
Relative Strength Index (RSI): He employed the RSI to identify overbought
and oversold conditions. An RSI above 70 indicated a potential overbought
condition, while an RSI below 30 suggested an oversold condition.
Bollinger Bands: Bollinger Bands were used to measure volatility and
identify breakout opportunities. Price movements outside the bands signaled
increased volatility and potential trading opportunities.
MACD (Moving Average Convergence Divergence): The MACD indicator helped CIS
identify changes in momentum and trend direction. Bullish crossovers (MACD line
crossing above the signal line) and bearish crossovers (MACD line crossing
below the signal line) were critical signals for entering and exiting trades.
Market Psychology
Understanding market psychology was crucial to CIS’s success. He often took
a contrarian approach, buying when others were selling in panic and selling
when others were buying in euphoria. His ability to remain detached from the
prevailing market sentiment allowed him to make rational decisions based on
data and analysis.
Risk Management
Position Sizing: CIS meticulously determined the size of each trade based
on his total capital and risk tolerance. This approach helped him manage risk
and avoid overexposure to any single trade.
Stop Loss: He set strict stop-loss levels to limit potential losses on each
trade. These levels were based on technical indicators and his risk tolerance.
Capital Preservation: One of his key principles was to protect his capital.
He avoided taking excessive risks that could result in significant losses,
ensuring that he could continue trading even after setbacks.
Additional Techniques
Scalping: CIS often employed scalping strategies, making numerous small
trades throughout the day to take advantage of minor price movements. This
approach required quick decision-making and a keen understanding of market
microstructures.
Momentum Trading: He focused on stocks with strong momentum, buying shares
that were trending upward and selling those that were losing steam. This
strategy allowed him to capitalize on short-term trends and maximize profits.
News Trading: CIS kept a close eye on news events and market announcements.
He used this information to make informed trading decisions, capitalizing on
the market’s reaction to news and economic reports.
Psychological Discipline and Resilience
A significant part of CIS’s success lies in his psychological discipline
and resilience. He maintained a calm and focused mindset, avoiding impulsive
decisions driven by emotions such as greed or fear. This psychological
fortitude allowed him to navigate volatile markets and make rational decisions
based on his analysis.
Achievements and Legacy
By the mid-2010s, CIS had grown his initial capital to over ¥20 billion,
making him one of Japan’s most successful traders. His success attracted
significant attention, and he became a well-known figure in the trading
community. Despite his fame, CIS has remained relatively private, focusing on
his trading rather than seeking the spotlight.
CIS’s achievements are not only measured by his financial gains but also by
his impact on the trading community. His innovative strategies and disciplined
approach have been studied and emulated by traders worldwide. He has inspired
countless individuals to pursue trading with a strategic mindset and a
disciplined approach to risk management.
CIS’s trading journey is a remarkable story of success, discipline, and
strategic acumen. From his modest beginnings with ¥3 million, he navigated
through market panics, leveraged technical analysis, and maintained rigorous
risk management to build a vast fortune. His legendary trades, such as those
during the dot-com bubble burst, the Livedoor shock, and the 2008 financial
crisis, highlight his ability to profit from market inefficiencies and
overreactions. Today, his strategies and principles continue to inspire and
educate traders around the world, cementing his legacy as one of the greatest
traders in modern history.
CIS is certainly an inspiration to me.
