Chapter 1 [Part 1]: The Impulse of the Market and the Baptism of N-Value and E-Value
I. The rooftop of the building and the microcosm within the screen
In 2018, a late spring afternoon.
The blazing sun pressed up the heat of the asphalt, and the cool air from the business car's air conditioner barely brushed against the sweat.
I—Koomugi—stood in a coin parking lot in a building district in Tokyo, leaning on the steering wheel and staring at my smartphone as I went about my outside sales.
As a company employee, my job involved cold calls to clients, creating proposals, and above all the monthly “sales quotas.” There were days when I bowed my head, chasing numbers, feeling a vague sense of stagnation.
“FX... foreign exchange margin trading, maybe.”
The trigger was a trivial line I saw in an online advertisement.
Around the clock, currencies are bought and sold worldwide, and with a single order my account balance would increase or decrease in real time. The green and red candlesticks on the smartphone screen wriggled like living things.
（If I could catch this wave with my own power... wouldn’t I have a second, free pillar besides my salary from the company?）
A thump rose in my chest.
I nervously deposited a few tens of thousands of yen of my meager extra funds into the FX account I had just opened.
The moment I clicked the “Buy” button, the heart-pounding tension surged as if my heart would leap out of my chest.
The price rose by a few pips, and the account balance turned positive by 1,200 yen.
“Amazing...! Money really increased with just my own finger...”
I was instantly captivated by the tiny universe of “the market” I had never known before.
In the midst of days of chasing numbers as a salesperson, this blue-glowing screen appeared to be a magical door that would lead me to a new future.
However, it didn’t take long to realize it was a sweet trap.
Beginner’s luck didn’t last a week. Trades based on guesswork quickly went wrong, and after several straight losses, profits disappeared in an instant.
“If you’re just buying and selling haphazardly, that won’t do. The market must have ‘rules’.”
With that thought, I threw away all time for travel between client visits and nighttime hours, and entered the world of market analysis—so-called “technical analysis.”
II. N-values and E-values — The illusion of the “Holy Grail” granted through geometry —
When I started studying technical analysis on my own, what drew me most strongly was the “value width observation theory (N-values and E-values)” in Elliott Wave theory.
The market seemed to move randomly, but in fact, it appeared to trace and move along beautiful geometric “waves.”
In rising or falling trends, there was a theory that from the heights and widths of past waves you could predict the next target value in pips.
I drew beautiful diagrams in my notebook and hammered the formulas again and again.
[Basic structure of value width observation in waves]
・N calculation value (N-value): Predict the range of the first wave by sliding it from the starting point of the pullback (retracement).
Formula: Target Price = B + ( A - L )
（The rise from the low L to the high A is added directly to the pullback price B to obtain the target point）
・E calculation value (E-value): Predict the first wave’s range by extending the rise from the most recent high by the same amount to the maximum possible wave length.
Formula: Target Price = A + ( A - L )
（From the low L to high A, add the rise again on top of the high A as the ultimate target point）
When this was applied to past charts, there were many moments where the wave turned perfectly at the target.
“...What is this? It’s perfect!”
Staring at the candlesticks overlapping on the chart, I trembled.
If a wave rose 100 pips from the low to the high, then in E-value calculations that point would be reached, and the buying power would be exhausted at that moment. If you place a pinpoint counter-trend short right there, you’d rip out giant pips as the price plummets from the top.
The theory was flawless.
When the market rose to its peak and reached the geometric limit point of the E-value, the buyers’ energy exhausted, and sellers surged in.
If you hit that exact point with a counter-trend trade, that would become the ceiling, and the price would drop sharply, yielding enormous pips.
I drew multiple horizontal lines on the chart and used indicators capable of calculating N-values and E-values to place limit orders.
“I have become a ‘smart trader’ who can pinpoint the market’s tops and bottoms!”
That sense of omnipotent satisfaction dominated my mind.
I never imagined that night would come at that time...
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