In which market condition—bull, bear, or ranging—does his trading system perform best? How would he adjust his strategy in response to market changes?

Okay, let's talk about the trading philosophy of this legendary Japanese retail investor, Takashi Kotegawa (screen name B.N.F.). Think of him like a martial arts master—his "martial techniques" (trading system) aren't just a single move; they transform endlessly depending on the "opponent" (market environment).

Which market environment is his "home ground"?

If we had to pick the environment where he performs best, it's undeniably the Sideways/Ranging Market.

Simply put, a sideways market is when stock prices oscillate within a box, unable to break decisively higher or lower. Why is this his sweet spot?

Because one of his core strategies is "Trading Divergence Reversals".

Don't let the name intimidate you. Think of it this way:

Imagine a rubber band (e.g., the 25-day moving average). The stock price is like a ball tied to this band. When the ball gets suddenly stretched too far from the rubber band due to news or sentiment (this is "excessive divergence"), the elasticity of the band will pull it back.

What B.N.F. does is bet that the ball will "snap back" when he judges it’s been stretched "too far".

In a sideways market, this "snap back" phenomenon is most common and reliable. The market lacks a clear direction; the forces of buyers and sellers are roughly balanced. Prices go up—people sell; prices go down—people buy. This back-and-forth movement is very rhythmic. This perfectly allows his skill of "catching rebounds" to shine.

How does he adjust his strategy based on changing markets?

B.N.F. is legendary precisely because he isn't rigid. He knows very well how to adapt to the conditions. His core philosophy, "trading divergence," gets applied in entirely different ways based on the broader market context.

1. In Bull Markets: Go with the flow, buying only, no shorting

Core Strategy: Buy the dip.
How He Does It: Bull markets have a strong upward bias. He focuses on fundamentally sound, strong stocks. When these stocks experience rapid, temporary pullbacks due to minor negative news or profit-taking, deviating from their uptrend, he decisively enters a long position.
In Plain Terms: He doesn't short against the strong wind (the bull market). He waits for the wind to ease slightly (temporary pullback) and jumps on that upward-bound "train" for a ride. Why? Because he knows the main trend will help push the price higher.

2. In Bear Markets: Rallies are opportunities to short

Core Strategy: Sell the rally (short the bounce).
How He Does It: Bear markets have a downward bias. Here, he flips his approach, focusing mainly on short selling. He looks for stocks showing sudden, unsustainable bursts of strength ("spike rallies") within their downtrend. He views these bounces not as entry signals, but as opportunities to escape—or short. Once such a sharp but temporary rally occurs, he initiates a short position (selling borrowed shares), betting the price will revert to its downward path.
In Plain Terms: Buying on the way down is like catching falling knives. Instead, he waits for others trying to chase the bounce to jump in, and then calmly sells his "inventory" (shorts) to them at a higher price, anticipating the rally will quickly exhaust itself and prices will fall further.

3. In Sideways Markets: Sell high, buy low, trading the range

Core Strategy: Trading both ends of the bounded range.
How He Does It: This is his home ground, as mentioned. Prices move within a defined channel. He buys near the range low (support level) when oversold signs appear, and sells near the range high (resistance level) when overbought signs appear. He might also short the top and cover (buy back) near the bottom.
In Plain Terms: He’s like playing table tennis, hitting the ball back when it bounces near his side of the table (buying support), and preparing to react as it approaches the opponent's side (selling resistance). It's a constant back-and-forth, capturing the profit from each swing without greed.

To summarize

The soul of B.N.F.'s trading system lies in adaptability.

His system is most efficient in sideways markets, as they are the quintessential scenario for his "divergence reversal" strategy.
However, he absolutely does not rely on just one market type. He's more like a top-tier surfer: he doesn't fight the ocean (the primary market trend); instead, he keenly judges the rise and fall of each wave (short-term swings) and then expertly guides it.

In bull markets, he guides the waves on pullbacks. In bear markets, he guides the waves on rallies. In sideways markets, he guides the waves back and forth. This adaptive mastery over the market's rhythm is the key to his consistent profitability and legendary status.