In the realm of trading, have you ever encountered the tale of B.N.F, the Japanese legend and genius trader who transformed a humble 1.64 million yen investment (about $16,000) into a staggering 20 billion yen in merely eight years through his ingenious swing trading strategies?
Commonly referred to as the “JCOM Guy,” B.N.F’s extraordinary journey into the trading world has left traders and investors alike in awe of his brilliance.
This blog post delves into two pivotal swing trading strategies that B.N.F adopted on his path to financial glory, as well as his distinctive trading style.
✏️ Table of Contents
🔍 Who is B.N.F?
Before we dive into his strategies, let’s get to know the man behind the legend.
B.N.F is no ordinary trader. He began his trading journey while still a college student, armed with a modest 1.64 million yen he had meticulously saved from his part-time jobs.
In the blink of an eye, his assets swelled to 61 million yen within just one year. Fast forward eight years, and he had soared to a staggering 20 billion yen. But what catapulted him to stardom was the “JCOM Stock Shock,” an event that saw him raking in 2 billion yen in a mere 16 minutes, earning him the moniker “JCOM GUY”.
⚡ The JCOM Stock Shock: A Fortuitous Turn of Events
B.N.F’s journey to fame began with a twist of fate that sent shockwaves through the Japanese stock market.
On December 8, 2005, Mizuho Securities, a renowned financial institution, made a colossal blunder while placing an order for JCOM stock. Instead of selling one share for 610,000 yen, they accidentally ordered to sell 610,000 shares for a paltry 1 yen each. The consequences were catastrophic, with JCOM stock plummeting to a fraction of its initial value.
While Mizuho Securities grappled with the fallout of their mistake, B.N.F, then a 27-year-old individual trader, smelled opportunity in the chaos. He recognized the sharp drop in JCOM’s stock price as an anomaly and pounced on it. Despite Mizuho Securities’ frantic attempts to cancel the erroneous order, technical glitches came to B.N.F’s aid. Within a mere 16 minutes, he had raked in over 2 billion yen (approximately $20 million) in profit as J-COM stock staged a miraculous recovery.
📈 B.N.F’s Distinct Trading Style
B.N.F is a maverick when it comes to trading. His simple, yet unique style is built around swing trading, and he pays little heed to corporate performance and fundamentals. Instead, he determines the timing of buying and selling stocks based on trends in market price actions. What’s more, he is a staunch advocate of trading solely with cash, eschewing the allure of leverage. It all started with that 1.64 million yen he had saved from his college days of part-time work.
🏹 Decoding B.N.F’s Swing Trading Strategies
1. The Divergence Rate Contrarian Method
B.N.F’s meteoric rise owes much to his mastery of the divergence rate contrarian method, a key component of his swing trading strategies.
This ingenious strategy centers on keeping a watchful eye on the 25-day moving average deviation rate of stock prices. B.N.F would identify stocks that had experienced significant price drops and ensure that these drops were beneath their original valuations.
Diverging from the common investor practice of avoiding falling stocks out of fear, B.N.F views them as hidden gems. He purchased stocks at their nadirs, anticipating eventual rebounds. He relies on deviation rate rankings from investment sites to identify these opportunities. As the deviation rate inches back to zero, he executes sell orders, locking in substantial profits.
One of the secrets to B.N.F’s success lies in his astute understanding of the tendency for stock prices to come back to the moving average line like a magnet even when they have diverged from it. He leverages this phenomenon to his advantage, waiting for stocks to make their way back to the moving average line, a strategy that has consistently paid off.
2. Sequential Swing Trading
As B.N.F’s wealth burgeoned, he shifted gears in 2004 to embrace sequential swing trading. This tactical approach involves closely monitoring the rise and fall of stocks within specific sectors and riding the waves of price trends.
B.N.F’s secret weapon is his meticulous tracking of related stocks within sectors and their correlation with the Nikkei average, tracking approximately 700 stocks to grasp how they related to one another within their sectors.
When one stock within a sector aligns with the Nikkei average and begins to ascend, he pounces on other related stocks within the same sector that are still lagging behind. This astute strategy allows him to harness the power of positive market sentiment and rising stock prices.
B.N.F’s journey from a modest 1.64 million yen to a colossal 20 billion yen in just eight years is a testament to his trading wizardry. His unconventional strategies, including the divergence rate contrarian method and sequential swing trading within his swing trading strategies, reveal the importance of adaptability and a profound understanding of market dynamics.
Though B.N.F’s methods might not be a one-size-fits-all solution for every trader, they provide invaluable insights into the world of trading. Aspiring investors can draw from his disciplined approach, which hinges on meticulous research, impeccable timing, and astute risk management. The legend of the “JCOM Guy” continues to inspire and captivate traders worldwide, reminding us all that in the world of trading, fortunes can be made with the right mix of skill, strategy, and a dash of audacity.
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