Japanese → English transcript

If you, Mr. Yozawa, were to start doing FX now, would you narrow it down to one

currency pair? The capital is five hundred thousand yen.

I’m thinking of trading either EUR/ USD, USD/ JPY, or GBP/ JPY.

If it were me, I would narrow it down to one currency pair.

I’ve always stuck to just one currency pair.

Then I finally increased it and, hmm, now it’s three.

I think a lot of people trade a bunch, but my way is basically to just unravel that

kind of mental confusion as much as possible. That’s my method.

I would look for where you might get confused, and that was like decluttering my

environment and sorting out my relationships and so on.

Yeah. Good evening, I always learn a lot from you. Mr.

Yozawa, what technical know- how do you value in cryptocurrency trading?

Oscillators, RSI, and trendlines. Or rather than trendlines, moving averages.

GMMA. It’s super simple, right?

Yeah. I do understand the meaning of pretty much everything else and use them too,

but I feel like just one oscillator- type indicator and one trend- type

indicator is enough. For the time being, anyway.

There are all sorts of other things too, though.

Like tools that display higher timeframes.

For example, when you’re on the one- hour chart,

the four- hour candles are shown on the same chart,

or tools that display volume by price horizontally.

Some of those are actually pretty useful.

And there are ones that draw arrows too. On each candlestick like this.

I think it’s fine to use whatever,

because the calculation conditions are different,

so the way you read each one changes, right?

For example, stochastics and RSI are totally different, right?

It’s better to fix your tools and really master them. No matter how you look at it.

There are that many out there.

I trade FX, and in the end it all comes down to setting stop- losses properly and

sticking to your rules, doesn’t it?

Yeah, that’s right. When you’re doing FX, changing your stop- loss line,

or deciding not to stop out after all, instead of changing things over and

over and over,

You follow through on what you decided at the start.

Humans keep changing their minds over and over. When things stop going well,

you start thinking,“ Maybe I should just quit,” you know?

And that shows up directly in markets like crypto, right? Prices skyrocket so fast

it’s stupid, then everyone dumps like crazy, so stupidly fast. Haha.

So when crypto is dropping I’m like,“ Oh,

so today is the big crypto dumping day.”

I write,“ Thanks for your hard work,” to provoke them a bit,

but why do you change your mind so fast?

You end up saying something completely different.

Only the people who stick to one approach

can ever get a clear result on whether that one thing was right or not.

Only those who see it through.

If you don’t stick to anything and just wander left and right, you get nowhere.

It is the same with FX. The people who keep changing their minds are the problem.

Try doing it exactly the way you decided at the start. Yes.

That is all there is to it. The reason is, if you do not, you cannot grow.

You cannot even reflect properly. So, does“ risk- reward” actually mean anything?

For example, if you keep taking trades with risk ten and reward one,

then when you lose you’ll get that slow- and- steady- then- big- crash pattern,

but— Because your win rate will go up by that much, I think in total,

probabilistically,

your overall returns would break even.

But in FX it is just a choice between up or down, so why does everyone lose?

If you ask why they lose, one reason is that they make mistakes. Right.

For example, using excessive leverage, or repeatedly betting in the same

direction you believe in.

Then the market gets pushed in a direction you did not expect,

and because of the excessive leverage you get liquidated.

I think that is the most common pattern. As for,“ Does risk- reward mean anything?”

yes, it does. I think it definitely matters. Because if you

put it another way,“ risk- reward” is the distance to your stop- loss point.

For example, say the place where you set your stop- loss is 30 pips away.

And on the other hand, you set your take- profit line at 45 pips.

Then this has a one point five risk- reward ratio, right?

Since the risk is one and the reward is one point five, you are definitely cutting

it at the risk. You cut it at the risk of one, and if you keep taking trades like

that with a reward of one point five,

the risk- reward is getting better,

so that means you do have a positive expectancy. Yeah.

“ Does risk- reward even matter?” It does matter, right. Something like that.