No.1 Trader in the World Takashi Kotegawa | How he Made Money from Stock Market

Summary

Takashi Kotegawa, a Japanese trader known as the 'Bedroom Trader,' turned $1,000 into $153 million by seizing an incredible trading opportunity caused by a mistake in 2005. His unique strategy focuses on trading during bearish markets, using technical indicators like the 25-day moving average and MACD to spot trends. Kotegawa’s success didn’t come overnight—it was built over years of refinement and patience. His story highlights the importance of timing, strategy, and leveraging market errors for huge profits, though such opportunities are rare and not easily replicable.

Takeaways

• 😀 Takashi Koteogawa turned $1,000 into $153 million over eight years, primarily by trading in bear markets.
• 😀 Takashi became known as the 'Bedroom Trader' because he conducted most of his trading from his bedroom.
• 😀 The initial capital Takashi used came from an error in the stock market, where a trader mistakenly sold 610,000 shares at a significantly lower price.
• 😀 Takashi's strategy involves finding opportunities in bear markets, where stocks drop below their 25-day moving average.
• 😀 He focuses on quick reversals in the market, often using indicators like EMA and MACD to capture momentum during market downturns.
• 😀 His approach is based on finding stocks in bearish momentum and waiting for a reversal before making a trade.
• 😀 Takashi doesn’t rely on expensive indicators or tools; instead, he uses simple moving averages and momentum-based strategies.
• 😀 He prefers a disciplined approach to risk management, ensuring that he doesn't take excessive risks even when trading on margin.
• 😀 The large gains Takashi made were not from a single trade, but from consistent trading and capitalizing on small, calculated opportunities over time.
• 😀 Takashi’s story is a testament to the power of long-term patience and strategy in trading, despite the initial errors or random luck that can jumpstart a trader's capital.
• 😀 While Takashi’s story is inspiring, it’s important to note that such huge profits are rare, and most traders will not experience the same success.

Q & A

Who is Takashi Kotehawa, and why is he called the 'Bedroom Trader'?

Takashi Kotehawa is a Japanese trader who gained fame for turning $1000 into $153 million. He is called the 'Bedroom Trader' because he conducted all his trades from his bedroom, using his computer.

What event allowed Takashi Kotehawa to make his initial profit?

In 2005, a trader from Mizo Securities made a mistake by selling 610,000 shares at a very low price, which created a massive opportunity for Kotehawa. He bought 7100 shares at an absurdly low price, later turning that investment into millions.

How did Takashi Kotehawa turn his initial $17 million into $153 million?

After making $17 million from the initial error, Kotehawa continued to trade smartly, using a combination of technical indicators and patience. Over the course of several years, he turned his profits into $153 million.

What technical indicators did Takashi Kotehawa use in his trading strategy?

Kotehawa used the 25-day exponential moving average (EMA) and the MACD (Moving Average Convergence Divergence) to analyze stock price movements, identifying buying opportunities when stocks were significantly below their 25-day moving average.

Why does Takashi Kotehawa prefer to trade in bearish markets?

Kotehawa finds more opportunities in bearish markets because, in a downtrend, there is potential for stock reversals, which he could capitalize on using his technical analysis strategy.

What was the significance of the 25-day moving average (EMA) in Kotehawa’s strategy?

The 25-day moving average (EMA) was a key indicator in Kotehawa's strategy. He looked for stocks that were trading at least 20% below their 25-day EMA, indicating a potential buying opportunity during a bearish market.

How does Takashi Kotehawa decide when to buy a stock during a bearish market?

Kotehawa would look for stocks that had fallen significantly below their 25-day moving average. He would then wait for a reversal signal, such as a MACD crossover on a shorter time frame (like 15 minutes), before buying.

What is MACD, and how does Takashi Kotehawa use it in his trading?

MACD (Moving Average Convergence Divergence) is an indicator that shows the relationship between two moving averages of a stock's price. Kotehawa uses MACD crossovers on shorter time frames to identify potential entry points for trades during stock reversals.

Did Takashi Kotehawa's strategy always lead to profits?

No, Kotehawa’s strategy didn't guarantee profits on every trade. Market conditions and the behavior of individual stocks could still result in losses, but his disciplined approach over the long term helped him accumulate significant wealth.

What key lesson can we learn from Takashi Kotehawa’s story?

The key lesson from Kotehawa's story is that wealth creation in the stock market takes time, strategy, and patience. While luck can play a role, consistent application of well-thought-out strategies and a disciplined approach to trading are essential for success.