Swing Trading Memo for Herbivore Apprentice Investor #2026/5/20

◼️Today's Schedule

Tokio Marine earnings
FOMC Minutes (held 4/28-29) (5/21 3:00)
NVIDIA earnings (around 5/21 5:20)

◼️Major Indices (Day-over-day)

Nikkei 225 -746.18 (-1.23%)
TOPIX -59.02 (-1.53%)

◼️Portfolio

Unrealized P/L -1.71%
Holdings 9

Position P/L Ranking

◼️Profit Taking/Stop Loss

Murata Manufacturing (200 shares) 0 yen (exited at break-even)
Ibiden (10 shares) -3,170 yen
Mitsui Kinzoku (4 shares) -5,420 yen
Tokyo Ohka Kogyo (34 shares) -7,854 yen
Sumitomo Electric (26 shares) -10,114 yen
Meiko Electronics (12 shares) -10,200 yen
Furukawa Electric (7 shares) -10,444 yen
Resonac HD (33 shares) -20,262 yen

◼️Realized P/L

Monthly +465,005 yen
Yearly +1,560,594 yen

◼️Today's Thoughts

The market dropped quite a bit again today, so I calmly cut my losses.

Electric wire stocks in the morning session fell significantly, dragged down by Fujikura, but recovered in the afternoon session.
Furukawa Electric, in particular, is strong. The chart looks fine as well.

Murata dropped quite a bit in the morning session, so I was forced to sell.
My total realized profit is only about +2,800 yen, so honestly, we don't get along well.
That thing called Murata can rack up massive unrealized losses if you leave it alone, so it falls into the category of malicious price action, haha.
I'm reluctant to increase my position at a high price, so I'll think about what to do tomorrow.

I'm trying to replace stocks in my portfolio by looking for relatively good ones even in this bad environment, but I don't know what will happen tomorrow, haha.

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Everyone, what kind of mindset do you have when you aim to earn 5,000 yen in a short-term trade?

1. Accumulate +1,000 yen and +2,000 yen to reach +5,000 yen.
2. Accumulate +1,000 yen and +2,000 yen while cutting losses randomly to reach +5,000 yen.
3. Offset a -5,000 yen loss with a +10,000 yen gain to reach +5,000 yen.
4. Take seven -1,000 yen losses and four +3,000 yen gains to reach +5,000 yen.

Both 3 and 4 emphasize RR (risk-reward) and involve trading while calculating the remaining profit.
It's a pattern where if your losses become smaller, you naturally end up winning.
The ideal is 4, but since I'm slow to escape, I end up with 3, haha.

Beginners often fall into the traps of 1 and 2.
Since neither considers RR, they tend to fall into the 'small wins, big losses' pattern.
This is because they don't anticipate what will happen when they have unrealized losses.

With the mindset of 1 or 2, you end up thinking, 'I could have made 10,000 yen, but I only made 5,000 yen because I cut my losses at 5,000 yen.'
If you consider RR, a trade that leaves you with +5,000 yen is a perfectly good winning trade, so I think it's a shame to have that kind of mindset.

Trades like 3 and 4 will overwhelmingly leave you with more profit compared to 1 and 2 as the number of trials increases.

I think this way of thinking comes naturally to people who are used to playing imperfect information games like Mahjong or poker.
I'm literally doing those kinds of calculations while building hands to make a comeback, haha.