(also known as Sokyu Honma or Sokyu Homma and sometimes called the God of markets ; 1724–1803) was a rice merchant from Sakata,

Japan Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...

who traded in the

Dōjima Rice Exchange The Dōjima Rice Exchange (堂島米市場, ''Dōjima kome ichiba'', 堂島米会所, ''Dōjima kome kaisho''), located in Osaka, was the center of Japan's system of rice brokers, which developed independently and privately in the Edo period ...

Osaka is a designated city in the Kansai region of Honshu in Japan. It is the capital of and most populous city in Osaka Prefecture, and the third most populous city in Japan, following Special wards of Tokyo and Yokohama. With a population of 2. ...

during the

Tokugawa Shogunate The Tokugawa shogunate (, Japanese 徳川幕府 ''Tokugawa bakufu''), also known as the , was the military government of Japan during the Edo period from 1603 to 1868. Nussbaum, Louis-Frédéric. (2005)"''Tokugawa-jidai''"in ''Japan Encyclopedia ...

. He is sometimes considered to be the father of the

candlestick chart A candlestick chart (also called Japanese candlestick chart or K-line) is a style of financial chart used to describe price movements of a security, derivative, or currency. It is similar to a bar chart in that each candlestick represents all f ...

, a form of

technical analysis In finance, technical analysis is an analysis methodology for analysing and forecasting the direction of prices through the study of past market data, primarily price and volume. Behavioral economics and quantitative analysis use many of the sam ...

used in stock markets. Around 1710, a

futures Futures may mean: Finance *Futures contract, a tradable financial derivatives contract *Futures exchange, a financial market where futures contracts are traded * ''Futures'' (magazine), an American finance magazine Music * ''Futures'' (album), a ...

market emerged for rice, which had previously been traded exclusively on the spot. This system used ''coupons'', promising delivery of rice at a future time. From this, a

secondary market The secondary market, also called the aftermarket and follow on public offering, is the financial market in which previously issued financial instruments such as stock, bonds, options, and futures are bought and sold. The initial sale of the s ...

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. In 1755, he wrote (三猿金泉秘録, ''San-en Kinsen Hiroku'', The Fountain of Gold - The Three Monkey Record of Money), the first book on

market psychology Behavioral economics studies the effects of Psychology, psychological, cognitive bias, cognitive, emotional, cultural and social factors on the decision making, decisions of individuals or institutions, such as how those decisions vary from t ...

. 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 recognizing this can enable one to take a position against the market: "''when all are bearish, there is cause for prices to rise"''''Beyond Candlesticks: New Japanese Charting Techniques Revealed'', Steve Nison , Wiley Finance, 1994, , p14. (and vice versa). He describes the rotation of Yang (a

bull market A market trend is a perceived tendency of financial markets to move in a particular direction over time. Analysts classify these trends as ''secular'' for long time-frames, ''primary'' for medium time-frames, and ''secondary'' for short time-fram ...

), 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. Some sources claim he wrote 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, ''Honma Sokyu Soba Zanmai Den'', Honma Sokyu --- Tales of a Life Immersed in the Market)

References

1724 births 1803 deaths Japanese stock traders Japanese investors {{Japan-business-bio-stub