Self-control is so important. You have to conserve your assets. That’s what insulates you from the downturns and gives you the ammunition to make money. One secret was identifying the machines most likely to give bigger payouts. Play enough ti take advantage of the odds. But the game taught a bigger lesson: when to cut and run. The more opponents you have, the worse your chances are. You lose nothing by running. That’s how he now plays the stock market. CIS says he bets wrong four out of 10 times. The trick is to sell the losers fast while letting the winners ride. For him, a well-played stop-loss is just about the most beautiful trade there is. He began by betting on what he thought were undervalued companies, and he lost money. He found success after a friend gave him a piece of advice: Forget the fundamentals. CIS doesn’t subscribe to the Nikkei or any other newspaper. Nor does he scrutinize earnings reports or parse central bank statements or spend much time looking at moving averages or other price chart patterns normally associated with technical trading. Buy stocks that are being bought, and sell stocks that are being sold. But The human mind is hard-wired to bet on reversals, Shefrin says (Gambler's fallacy). “If you can get yourself out of that mindset and bet against the crowd, who act instinctively, then you have an opportunity to make money,” Shefrin says. Two years after learning to follow the momentum, CIS says, he’d made 80 million yen day trading.
