Homma Munehisa

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In this Japanese name, the family name is Honma.

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Munehisa Homma (本間宗久, Honma Munehisa^?) (also known as Sokyu Homma, Sokyu Honma) (1724-1803), was a rice merchant from Sakata, Japan who traded in the Ojima Rice market in Osaka during the Tokugawa Shogunate. He is often considered to be the father of the Candlestick chart and his trading success reputedly led to him becoming an honorary Samurai.^{[citation needed]}

Until about 1710, only physical rice was traded but then a futures market emerged where coupons, promising delivery of rice at a future time, began to be issued. From this, a secondary market of coupon trading emerged in which Munehisa flourished. Stories claim that he established a personal network of men about every 6 Km between Sakata and Osaka (a distance of some 600 Km) to communicate market prices. ^[1]

In 1755, he wrote (黃金泉：三猿金錢錄, San-en Kinsen Hiroku, The fountain of Gold - The Three Monkey Record of Money), the first book on market psychology. In this, he claims that the psychological aspect of the market is critical to trading success and that traders' emotions have a significant influence on rice prices. He notes that this can be used to position oneself against the market when all are bearish, there is cause for prices to rise^[2] (and vice versa).

He describes the rotation of Yang (a bull market), and Yin (a bear market) and claims that within each type of market is an instance of the other type. He appears to have used weather and market volume as well as price in adopting trading positions. He is considered the most successful market trader in history, generating over $100bn in profits at today's prices, some years earning over $10bn a year.

Some sources claim he authored two other books (酒田戦術詳解, Sakata Senjyutsu Syokai, A Full Commentary on the Sakata Strategy) and (本間宗久相場三昧伝, Homma Sokyu Soba Zanmai Den, Honma Sokyu --- Tales of a Life Immersed in the Market)

[edit] References

^ Candlestick Charting Explained: Timeless Techniques for Trading Stocks and Futures, Gregory L. Morris, McGraw-Hill, 2006, ISBN 007146154X / 9780071461542
^ Beyond Candlesticks: New Japanese Charting Techniques Revealed, Steve Nison , Wiley Finance, 1994, ISBN 047100720X, p14.