24 million melted down to 1.6 million… A ghost story teller who saw hell made 330 million yen by “zero yen trade”.

With the reelection of President Trump and his tariff policy, the birth of new Prime Minister Takaichi, the Bank of Japan’s interest rate hike, and the daily record highs set by the Nikkei Index, 2013 was a year of major stock market fluctuations.

On the other hand, many people may have started to focus on side jobs or asset management because their real-life income did not increase as much as they had expected. Is it enough to just have a savings account in the “nasate NISA”? Many people are also interested in individual stocks, but are hesitant to try them because they are “scary” or “seem too difficult.

We interviewed Mr. Umeki, 42, a ghost story teller who built up total assets of 330 million yen in just five years, starting with 350,000 yen and increasing to 24 million yen in one year.

I don’t know why the stock market moves,” he said. That was the scariest part.

The real reason why he felt “scared” of individual stocks was not because they were risky, but because he did not understand them. How did Mr. Umeki learn to reduce his “I don’t know” by crawling up from hell and accumulating 330 million yen?

The lesson from “hell” that melted 24 million yen of assets into 1.6 million yen.

–In 2013, the stock market moved dramatically due to the Trump tariffs and the arrival of a new prime minister. How was your performance this year?

Umeki：My profit this year was about 200 million yen, and my total assets were about 330 million yen. Normally, I mainly trade day trades (short-term trades that are completed within the day), but as my capital has increased and I can no longer use it all on day trades alone, I started swing trades (trades held for a few days to a few weeks) and medium- to long-term trades (trades held for several months or longer) this year. I have also gradually expanded my investment targets to include U.S. stocks, gold, and silver.

–So you have been steadily increasing your assets?

Umeki: No, it was not smooth at all. When I had just opened my brokerage account, I took someone’s word for it and bought stocks on the swing side, but they didn’t go up at all, and I failed many times. I don’t know why they don’t go up. I didn’t know why it was going down. This “I don’t know” was the scariest part.

I studied in my own way, but because my knowledge was shallow, everything I did backfired, and I realized that “investing is so difficult.

–How did you get from there to your current performance?

Umeki: It was around the end of ’19 that I started to take it seriously, and that’s when I switched to day trading. The timing was just right for me to recover from the Corona Shock, so my original capital of about 350,000 yen increased to about 24 million yen.

Every day was a festival. When I woke up in the morning and looked at the stock price, it went up and up and up. I really thought I had a talent for stocks” (laughs).

–(Laughs.) – After you increased your capital to 24 million yen, did things go even better?

Umeki: No, it was hell from there. In 2009, when the Corona bubble ended, the tide completely turned. The methods that had worked until then were no longer applicable at all. If you bought, it went down; if you sold, it went up. I realized that my assets, which had amounted to 24 million yen, were down to 1.6 million yen. I was driven into a corner mentally.

I didn’t know what was wrong. I didn’t even know why I was losing. I was really scared to keep losing without knowing. It was much scarier than being a ghost.

–How did you recover from that?

Umeki: I studied again. I began to pay attention to margin buying and the movements of immovable stocks (stocks that are easily traded in the market), and at the end of 2011, I broke through the 100 million yen mark, and this year, I have reached 330 million yen. In the end, reducing the number of “I don’t know” was the first step in eliminating my fear.

OK with zero yen in funds! The secret of “too-simple air trading” that turned a loser into a millionaire.

–What can I do to reduce the number of “I don’t know”?

Umeki: Do simulations. If you suddenly practice with money, whether you win or lose, you will go on to the next trade without understanding why it happened. Even if you are lucky enough to win, there is no guarantee that you will win the next time. When you lose, you don’t know what went wrong, so you repeat the same mistakes.

But with simulation, you can calmly analyze “why it happened” without spending money. When I first started out, I would look at the actual price movements, write down “I would have bought here,” and then repeatedly check what happened afterwards.

After repeating this 20 to 30 times, I gradually became aware of winning and losing patterns. Then, naturally, “I don’t know” would decrease and I wouldn’t be afraid anymore.

–Umeki： How exactly do you do the simulation?

Umeki: For example, for day trading, I check the news and stocks that were on the news or stopped up the night before, select two or three that seem to be of high interest, and record them. I would note, “I would have bought at this price,” and then follow the subsequent price movements. As you record whether the price went up or down and how many yen it moved, you will gradually find your own winning pattern.

In the long term, it takes time to get a single result, so it is efficient to simulate several stocks at the same time that fit the rules you have set for yourself, such as “companies with growing sales” or “companies with high dividend yields. By doing this, you will be able to see what kind of stocks you can win and what kind of stocks you can lose.

–Can you really improve just by simulation?

Umeki: Yes, you can. If you do simulations well, you can gain as much experience as in practice for free. As you repeat the simulations, you will be able to see your own winning patterns and win rate, and you will be able to move on to practice with confidence.

Moreover, with simulations, even if there is an unexpected move, you can calmly investigate the cause without losing money. Is it the influence of the Nikkei Index, the earnings results of other companies in the same industry, or changes in supply and demand? By understanding the reasons for the unexpected one by one in this way, you will be able to respond to them without being rushed in practice.

Even office workers can do it! The shocking reason why the game is decided in “30 minutes from 9:00 a.m.

–I hear that day trading is efficient, but I have to work during the day. Should I start with swing trading?

Umeki：No, actually, day trading can be done in the first 30 minutes from 9:00 a.m. alone. However, it is ideal to watch quotes from around 8:30 a.m. before the close. Even if you are a company employee who has given up on daytime trading because you have to work during the day, you can still day-trade as long as you can secure this time in the morning.

Besides, you don’t have to think of day trading and swing trading separately. I, too, end up trading using elements of both. For example, if I buy a stock with the intention of swinging, but good news comes out later that day and the stock price rises to near my target, I can sell it. As a result, it’s totally possible that it turned out to be a day trade.

–I see. Now, please tell us about the characteristics of day trading, swing trading, and long-term investment.

Umeki：Day trading does not require a lot of difficult financial analysis because you make a decision instantly by looking at the supply-demand balance (the balance between those who want to buy and those who want to sell) at that moment. Swing is a style of holding a stock for a few days to a few months, and it is fine if you can check it two or three times a day. It does not require the instantaneous power of day trading, but it does require the ability to judge supply and demand by looking at the board (a list of buy and sell orders) and to grasp the value of a stock to some extent by looking at financial statements and news.

Long-term investment is suitable for those who can read financial statements, check news, and calmly wait for unrealized losses (a state in which the stock price has fallen and the valuation has become negative) to appear. I’m not good at reading financial statements, so I’m more of a day trader. Even at the time of the Corona Shock, I was a day trader, so I was able to sell on the same day and escape.

You can start with any style, but if you suddenly start day trading, many people don’t understand what’s going on because it moves so fast. Start by looking at it once a day, and when you get used to it, increase the number of times you make decisions. In this way, you will naturally learn to think like a day trader. Don’t be in a hurry, just proceed step by step and you will be fine.

Why margin trading with funds as low as 400,000 yen is indispensable for day trading

–Once you have gained some confidence through the simulation, it’s time to put it into practice. Can I start with a small amount?

Umeki: You can start with a small amount, but if you have a small amount of money, the stocks you can buy will be very limited. Stocks that attract a lot of attention and offer good opportunities often have high stock prices, so you can’t choose those stocks. It is disadvantageous to trade with a narrow choice.

Especially if you are going to do day trading, I would like you to prepare at least 400,000-500,000 yen. The reason is that you need margin trading to make money efficiently in day trading.

So ideally, you should study through simulations while accumulating funds, and start when your funds are around 400,000-500,000 yen.

–Margin trading is subject to additional payment (abbreviation for additional deposit. I’m afraid of the image of additional payment in case of loss) and debt. ……

Umeki: Many people have the image of “margin trading = scary. But the reason they are afraid of margin trading is because they don’t “get it.

Margin trading is a system where you borrow money or stocks from a securities company using your own money (margin) as collateral, and you can trade up to about three times your deposit.

Using this system, you can buy and sell the same stock multiple times in a day, and when you expect the stock price to fall, you can enter the market by selling (short selling: borrowing shares, selling them first, and buying them back later), which is a powerful weapon in day trading.

I understand that you are afraid of additional payment, but if that is the case, you should only use cash transactions (buying and selling stocks within your own funds).

If you use margin trading, you need to have at least 300,000 yen in reserve, so it is safer to have 400,000 to 500,000 yen to spare.

The important thing is to understand how it works before using it. It is absolutely not advisable to use margin trading without “understanding” how it works. However, once you understand how it works, it will become your weapon, not a debt.

Don’t go forward without understanding why you lost.” “Mental Management Techniques” practiced by a 300 million yen investor.

–When you start practicing, there will be times when you will lose. How do you regain your composure when that happens?

Umeki: I am the type of person who cannot change my mind without an answer, so I give some kind of answer, even if it is a hypothesis. If I move on without an answer, I will repeat the same mistakes, so I don’t touch the game until I find an answer.

So, when I lose, my mental management method is to think about “why I lost” and then take the next countermeasure. I think everyone has a different mental management style, but I think the important thing is not to move on to the next step without “not knowing.

–I think the important thing is not to move on to the next step without “not knowing. Once you have these three things in place, investing in individual stocks becomes less scary, doesn’t it?

Umeki: Getting started in stocks does not mean buying stocks. There are many things to do before that. I also started with 350,000 yen and came this far while making a lot of mistakes. Please proceed in the correct order and don’t be in a hurry.