Who was Homma Munehisa?

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Homma Munehisa (Honma Munehisa, 1724-1803) was a very skilled commodity (rice) trader around 275 years ago in Sakata, Japan during the Tokugawa Shogunate (Tokugawa jidai) in the Edo Era (Edo jidai). His theatre of operation was the Ojima Rice market in Osaka. He is to be believed the father of the candlestick charting analysis. He appears to be a well known trader with many accolades to his name including being honored as an Honorary Samurai for his trading skills and for his contributions to the advancement of the art of trading.

In total Homma wrote three books which are very very difficult to find. You might check out google books to find them. I went to the library (in Leiden there is an Asian library the largest of Europe) but could not find them. We therefore only know his three main works from an other book called the god of trading found on amazon Amazon link here* It is a great book easy to read, though you will need time if you are a novice. I found an PDF on Homma Munehisa”s book The Fountain of Gold. Soon Will make an short summary and post it. As that book can be found for free on google I strongly encourage it to google or duck duck go it.

Books of Homma Munehisa

  1. San-en Kinsen Hiroku, The Fountain of Gold – The Three Monkey Record of Money
  2. Sakata Senjyutsu Syokai  A Full Commentary on the Sakata Strategy
  3. Honma Sokyu – Tales of a Life Immersed

I tried to find these books but that was difficould.

In 1755, he wrote San-en Kinsen Hiroku, The Fountain of Gold – The Three Monkey Record of Money Amazon link here* . This is one of the oldest writing knwon that discusses psychology as an aspect of market behavior.He tells us that psychology is critical to trading and that emotions have a influence on markets.

Homma was the first to give us the 2 markets; bull, bear markets later that has been americanized.

I am sure you have heard about Buying The Rumor & Selling The News. Homma wrote that if you get news about something that could make a profit for you, wait three days and if it still looks good, it should be a profitable trade. We find this information also in the book reminisces of a stock operator See the review here This was based on the extensive Sakata Method discussion from his second book, Sakata Senjyutsu Syokai  A Full Commentary on the Sakata Strategy:

Three Crows (Bearish Reversal),

Three Soldiers (Bullish Reversal),

Three Methods (Continuation),

Three Buddhas (Head & Shoulders),

Three Mountains (Triple Top),

Three Rivers (Triple Bottom) and

Three Gaps.

A lot of what we read today have their roots in the books that Munehisa wrote.

In his third book, Homma Sokyu Soba Zanmai Den, written as Honma Sokyu – Tales of a Life Immersed in the Market, Munehisa shares his methods and techniques that made him a legend. His conservative manner and the defensive attitude he took into the market made him the finest trader to have walked the earth. His humility and the respect he gave the market made him one of the most profitable traders of all time.

But the beauty in the way he wrote it all was lost in translation when the west got hold of his philosophies and turned it into something more aggressive and offensive. And it was this rubbish that was taught to me and this nonsense that I was reading off books.

Never Buy The High. You are on the peak of an mountain thus what and look. Only a fool pays retail

And Never Sell The Low. Looking into the abyss, take you time be calm and what until you can look into the sky.