Challenging Japanese Stock Swing Trading with ChatGPT #51

I continue to engage in short-term swing trading where I purchase Japanese stocks during my weekday lunch break and, in principle, sell them during the next business day’s lunch break. I use ChatGPT for stock selection and trading decisions, verifying with my own money whether it is actually possible to make a profit in Japanese stock trading using AI.

This article is also written by ChatGPT, with the exception of the final “Thoughts on this session” section. The main text is organized based on actual trading records and the analysis performed at that time.

A loss of 12,300 yen on two short-selling positions. Losing the previous day’s gains, the cumulative loss exceeds 210,000 yen.

In the trades on November 10, I bought back Sumitomo Electric Industries and Mitsubishi Heavy Industries, which I had shorted the previous day, resulting in a total realized loss of 12,300 yen.

Although I secured a profit of 19,570 yen from selling three stocks the previous day, this time it was a complete reversal with two losses out of two trades. The result highlights the difficulty of short selling, which aims to profit from a decline in stock prices.

Both Sumitomo Electric and Mitsubishi Heavy Industries rose, resulting in realized losses.

Sumitomo Electric Industries (5802)

I shorted 200 shares at 1,478 yen on November 9 and bought them back at 1,491 yen the following day. The stock price rose by approximately 0.88% from the short-selling price, resulting in a loss of 2,600 yen.

In short selling, you make a profit if the stock price falls, but this time it moved in the opposite direction. However, the rise was relatively small, and the loss was limited.

Mitsubishi Heavy Industries (7011)

I shorted 100 shares at 3,053 yen on November 9 and bought them back at 3,150 yen the following day. The stock price rose by approximately 3.18%, resulting in a loss of 9,700 yen.

This stock moved against me more significantly than Sumitomo Electric and accounts for the majority of this session’s loss.

What is interesting is that in the previous day’s ChatGPT analysis, Mitsubishi Heavy Industries was listed as a candidate for a long position. However, because it had not recovered above the VWAP (Volume Weighted Average Price), the final assessment was to wait and see.

In the actual trade, I performed a short sale in the opposite direction, and the stock price rose the next day. In the analysis available this time, ChatGPT did not recommend shorting Mitsubishi Heavy Industries.

Regarding Sumitomo Electric as well, since I cannot confirm the specific basis for the judgment immediately before the short sale, I will record the results of the price movement without retroactively justifying the selection reason.

The new purchase is Chiba Bank. Evaluating the upward revision and shareholder returns.

On November 10, I newly purchased 100 shares of Chiba Bank (8331) at 2,597.5 yen. The investment amount is 259,750 yen.

Chiba Bank revised its earnings forecast upward the previous day, raising its net profit forecast from 107 billion yen to 122 billion yen. Furthermore, it increased its annual dividend forecast from 64 yen to 72 yen and also announced a share buyback of up to 15 billion yen.

ChatGPT evaluated the improved performance and strengthened shareholder returns and selected it as a buying candidate.

However, there is a possibility that the stock price increase due to the positive news has already been priced in. During the analysis, maintaining a dip above the VWAP level and avoiding buying at the high were considered important conditions.

It is impossible to confirm from the execution records alone whether these conditions were met at the time of the actual purchase. The verification point is whether the positive evaluation of the good news continues until noon on the next business day.

Kioxia is being carried over. The cumulative loss is -211,060 yen.

Kioxia Holdings, which was short-sold on margin for 100 shares at 8,622 yen on November 9, is treated as a carry-over in this verification ledger. Executions for this stock on November 10 are excluded from this tally.

The cumulative performance reflecting the settlement of these two stocks is 136 trades, 72 wins, 64 losses, a win rate of 52.9%, and a realized profit/loss of -211,060 yen. In November alone, there is a loss of 82,240 yen. All profit and loss figures are before taxes and fees.

What is important in this verification is that the meaning of the same upward factor is reversed between buying and margin short selling. In particular, short selling on stocks with good news carries the risk of expanding losses if the rise continues the next day.

Next time, I will confirm the continued rise of Chiba Bank and the carry-over decision for Kioxia, and verify the consistency between the selection of candidates for margin short selling and the actual trading decisions.

Thoughts on this time

・Mitsubishi Heavy Industries’ margin short sale was treated as “interesting,” but I felt it had risen too much yesterday, and since it rose the next day due to earnings, I didn’t like Chappy’s analysis result that it would rise for another day, so I just did a contrarian trade and it went poorly. Could it be that I’m losing every single margin short sale? ・Please forgive me for quietly following Chappy’s analysis and trend-following for Chiba Bank ( ｀・∀・´)ﾉﾖﾛｼｸ ・When I changed the prompt to include both margin short selling and buying as candidates, it started talking only about earnings, so from tomorrow I want to revert it to having it select stock candidates for purchase. ・Kioxia is a carry-over that violates the rules. It didn’t fall as much as I thought (about 8,800 yen during lunch break), so I thought it should fall more, but is that not allowed? Or rather, the lunch break might have been the timing to return it at a relatively low price. Looking at it now, the PTS is down. ・Lately, I’ve been feeling the limits of analysis by Chappy. That said, surely there must be a high-win-rate stock analysis prompt somewhere in this world. Has anyone published one? By the way, I’ve been ignoring Chappy lately, so does that make the title a scam??

※This article is a record of personal trading and verification, and does not recommend buying or selling specific stocks.

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