Recently, I have been delving into two legendary figures in Japan’s trading world, and I found that their stories are truly worth studying. One is BNF, revered as the “god of trading,” whose real name is Takashi Kotegawa. The other is CIS, who is known as the strongest retail trader. These two aren’t just long-time friends—their experiences are also strikingly similar.

Both of them started trading during their university years, gradually building from small capital into being able to manage assets worth hundreds of millions of yen. Even more impressive is that they both became famous in the same defining moment—the notorious J-COM wrong-order placement incident. That day, CIS earned 600 million yen, which was already wildly incredible. But Takashi Kotegawa was even more ruthless: in just 10 minutes, he made 2 billion yen—roughly 150 million RMB at the exchange rate of that time. Imagine that scene.

What’s interesting is that Japan’s trading circle has long been very low-key, and traders rarely disclose their playbooks publicly. But Takashi Kotegawa, quite unusually, leaked a momentum-following strategy, and CIS also shared his momentum principles. Later, many traders studied and applied them, and even now they remain especially practical.

Takashi Kotegawa’s early success actually came from contrarian investing. Between 2000 and 2003, the dot-com bubble burst, global stock markets turned bearish, and Japan was no exception. Investor sentiment was extremely pessimistic. But he found that even in a bear market, prices don’t just fall all the way down—there are always up-and-down swings as prices rebound. His thinking was that during times like this, asset prices are often severely undervalued. He would watch the deviation rate from the 25-day moving average and specifically look for stocks whose deviation rate is significantly negative. For example, if a stock’s 25-day line is 100 yen and the current price is 80 yen, the deviation rate would be -20%, which means the stock is severely undervalued—so he would buy and wait for a rebound. Different stocks and industries have different reference standards, and he would set benchmarks based on large-cap stocks, small-cap stocks, and industry characteristics.

In 2003, as the market warmed up, Takashi Kotegawa’s strategy also shifted. That change made his assets surge from 100 million yen to 8 billion yen. He started using a momentum approach—staying close to the market’s prevailing uptrend. He was used to short-term trades lasting about two days and one night. The key feature was that within a single day he would hold 20 to 50 stocks at the same time to diversify risk; then, the following morning he would decide on taking profit or cutting losses based on the new information, and quickly switch to fresh targets.

He is especially good at leveraging industry linkage effects—particularly at finding lagging stocks. For instance, in the steel industry, among the four major companies, if one starts rising, he would buy the other three that haven’t moved yet, riding the wave across the entire industry.

CIS’s thinking is not as methodical or specific as a full methodology, but his momentum principle actually serves as a perfect complement to Takashi Kotegawa’s strategy. CIS’s core belief is that stocks that keep going up are likely to continue rising, while stocks that keep falling are likely to keep falling. Most people treat stock upswings and downswings like a 50-50 probability game: seeing a run of gains makes them feel that it should be time to drop. But the market itself isn’t like that—it has strong continuation. Strong stocks draw in more capital, making the strong stronger and the weak weaker. We have to accept the market’s force instead of fighting against it.

The idea of buying on every dip should be avoided. When stocks surge sharply, many people fear being trapped at the top and wait for a temporary pullback before entering. But nobody knows whether that timing will ever show up; in a strong bull market, it’s easy to miss the entire move. The opposite of momentum trading is also the practice of adding to losing positions—adding even more bets to trades that have already failed, which only makes losses grow larger and larger.

CIS warns all traders not to blindly trust past rules. The market is a complex, dynamic system, and once rules are widely spread, they tend to stop working. Truly excellent traders are often born out of stock crashes, crises, or market turning points. When most people fall into panic, the market brings huge volatility—and the greater the volatility, the more opportunities there are. That’s when the small number of calm, decisive people really stand out. The key is not the win rate, but the overall account returns: what you need to do is stop losses in time, while letting small wins turn into big gains.

With all that said, investing still comes with risks, and trading requires caution. Still, these strategic ideas are definitely worth deep consideration—especially in the current market environment.