Recently, I delved into the stories of two legendary traders in the Japanese stock market and found that their trading philosophies still offer insights for today's markets. One is the so-called God of Trading, Takashi Kotegawa, and the other is the Retail Investor King, CIS. These two are not only longtime friends but also share remarkably similar experiences.

They both started trading during their university years and eventually became fund managers overseeing billions of dollars through continuous accumulation. The most famous incident is the 2003 J-COM order mistake, where CIS made 600 million yen in one trade, but Takashi Kotegawa was even more impressive, earning 2 billion yen in just 10 minutes. Such levels of profit are almost legendary in Japan’s trading circles.

Interestingly, Takashi Kotegawa’s trading approach has undergone noticeable evolution. In his early days, he mainly engaged in contrarian investing. During the 2000 internet bubble burst, global stock markets plummeted, and most people panicked and sold off. But he saw this as an opportunity—using the 25-day moving average divergence to identify severely undervalued stocks, then precisely bottom-fishing during rebounds. This method allowed his account to grow from a small amount to 100 million yen.

After the market warmed up post-2003, Takashi Kotegawa adjusted his strategy to trend-following. He began short-term trading over two days, holding 20-50 stocks at a time to diversify risk, and would decisively close or cut losses the next day. He was especially adept at leveraging industry linkage effects—if one of the big four steel companies rose, he would immediately position himself in the other three that hadn’t yet moved. This approach boosted his assets to 8 billion yen.

CIS emphasizes the core principle of trend-following. He believes that stocks that are rising will generally continue to rise, and those that are falling will keep falling. It sounds simple, but many people can’t do it—seeing a stock keep climbing, they get scared, and wait for a pullback to buy, only to miss out on the bull market. Strong stocks attract more capital, becoming even stronger, while weak stocks weaken further. The market is ruthless like that.

CIS also stresses avoiding averaging down on losing positions. When a stock you bought starts to decline, the smartest move is to cut losses and accept defeat, rather than doubling down in hopes of a turnaround. This is a common flaw among retail investors—adding to losing trades, which often results in even greater losses. The key isn’t winning percentage but overall returns and risk management.

Finally, both of them mention one point—don’t blindly believe in so-called golden rules. The market is a dynamic and complex system, and once a rule becomes widely known, it tends to lose effectiveness. True trading experts often emerge during major market crashes, economic crises, or turning points because most people panic, while only a few remain calm enough to seize opportunities. The greater the volatility, the more hidden opportunities there are—that’s the dividing line between winners and losers.