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Munehisa Homma

Munehisa Homma (1724–1803): rice merchant of Sakata and legendary operator of the Dojima market. Tradition credits his school with the origins of Japanese candlesticks and the first analysis of price psychology.

On this page

The oldest master in this gallery: two centuries before Wall Street, the rice futures markets of Osaka.
Period 1724 – 1803
Where Sakata and Dojima (Osaka), the rice futures market
Lens Price action
Attributed work San-en Kinsen Hiroku ("The Fountain of Gold", 1755)

Who he was

Portrait — Munehisa Homma

Munehisa Homma led the merchant house of the Homma family of Sakata, among the largest rice traders of Tokugawa Japan. He operated on the Dojima market in Osaka — the first documented futures market in history, where receipts on future rice were traded — and tradition attributes to him a run of winning campaigns so long it became proverbial: "the god of the markets" in the chronicles of his time.

Contribution

  • Recording prices in order to read them — tradition traces to his school the notation that would become the Japanese candlestick: open, high, low, close as the story of the session (see ohlc-candlestick). The modern codification came with the Sakata patterns and, in the West, with Steve Nison (1991).
  • Psychology before psychology — in the San-en Kinsen Hiroku, price depends not only on harvests but on the mood of the participants: when everyone is bearish, the decline is close to its end. Two centuries later we would call it sentiment analysis.
  • Yang/Yin rotation — markets alternating bullish and bearish phases as a natural cycle: an intuition that later traditions — from Dow to the cyclic school — would rediscover by other routes.

What today's students learn from him

  1. The chart is a psychological document before it is a mathematical one: every candlestick records a battle between buyers and sellers.
  2. Information pays only if it arrives first or is read better: Homma organised a relay chain between Osaka and Sakata for rice prices — the eighteenth-century version of the latency race.
  3. Consensus extremes are read in reverse: bearish unanimity is often the fuel of the rally.

Study path

In preparation — This entry will be extended with the Sakata patterns and the bridge to modern candlesticks. For the basics: ohlc-candlestick.

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