How does he screen out target stocks for daily trading from thousands of options? What are his stock selection criteria?

Okay, let's talk about the man known as the "Japanese Stock God"—B.N.F. (Takenori Kotegawa).

Many people assume he must have some mysterious, exclusive formula. But in reality, when laid bare, his methodology isn't complicated; you could even say it reflects that "the greatest truths are the simplest." The key lies in how he executed this simple method to its absolute extreme, combined with extraordinary discipline and focus.

Below, I'll break down in plain language how he finds his "prey" among thousands of stocks.

Revealing B.N.F.'s Stock Picking Secret: Simple, Yet Perfected to Extremes

First, let’s be clear: B.N.F. is not a "value investor" in the conventional sense (like Buffett, buying a company to hold long-term). He is a pure short-term trader, holding positions for potentially just minutes, hours, or a few days, rarely exceeding weeks. His goal is to profit from short-term price fluctuations.

Therefore, his stock selection criteria are entirely built around the core question: "Will this stock experience significant price movement in the near term?"

The Core Idea: Hunting for "Overdone" Declines (Technical Rebounds)

B.N.F.'s most famous and core strategy is contrarian investing based on "Moving Average Divergence Rate."

Sounds too technical? Don't worry, here's an analogy:

Think of a stock's price like a dog walking on a leash held by its owner, where the "25-Day Moving Average" (the average price over the past 25 days) is the owner.

The dog (stock price) typically moves around near the owner (25-day MA).
But sometimes, the dog gets excited and suddenly sprints far ahead (price surges), getting farther away from the owner.
Or it gets scared and dashes far backward (price crashes), also moving far from the owner.

Yet, no matter how far the dog runs, it will eventually be pulled back by the leash towards the owner. This "pulled back" action in the stock market is called "Mean Reversion."

B.N.F. is the one watching for the "scared dog." He searches for stocks that have fallen too sharply due to panic or other reasons in the short term—stocks that are "oversold" or "overextended." He anticipates that these stocks have a high probability of being "pulled back" like the dog, triggering a quick rebound. It's this rebound he aims to profit from.

The Specific Steps and Criteria for Stock Selection

So how does he find these "scared dogs" among thousands of stocks? Roughly, it's a three-step process:

Step 1: Casting a Wide Net, Defining the Scope First

He can't scrutinize charts for thousands of stocks every day. So he first applies a rough filter, focusing attention on:

High Volume Stocks: Put simply, these are the day's most active stocks—the ones seeing the most buying and selling. Low volume means little interest, like stagnant water where the price barely moves, unsuitable for short-term trading. He needs the bustling "battlefield."
Hot Sectors/Industries: He tracks which industries or sectors are currently generating the most buzz—like shipping stocks some time ago, or tech stocks at other times. Finding targets within hot sectors makes it easier to ride the momentum.

He uses multiple monitors; one is likely dedicated to tracking overall market sector heatmaps, as well as individual stock rankings by price change and volume.

Step 2: Handpicking, Finding the "Technically Oversold" Target

Within this rough scope, he uses his core measuring stick on each candidate stock:

Main Criterion: Negative Divergence Rate

This is the "distance of the dog from the owner" mentioned earlier. He specifically looks for stocks where the price is significantly below the 25-day moving average.

What's the magic number? There isn't one fixed value. But generally, if a stock, within just a few days, falls 20%, 30%, or even more below its 25-day average cost line, this creates a large "negative divergence," landing it on his "close watch list."
Why the 25-day MA? This is a very popular intermediate-term gauge for market strength/weakness in Japan, one he's most comfortable with. The principle is similar for 20-day or 30-day MAs.

Beyond this core metric, he incorporates other information to increase his success rate:

Candlestick Patterns: After a sharp decline, if there are signs of stabilizing, like a long lower shadow candlestick (a "hammer") or consecutive days without making new lows, this boosts his confidence that a bottom might be near.
Overall Market Sentiment: He's much more cautious if the entire market is in panic mode and crashing. But if the broader market is stable, and only an individual stock is getting unfairly slammed due to "bad news," that’s an even better opportunity.

Step 3: Contrarian Mindset—Be Greedy When Others Are Fearful

When a stock plummets, the market is filled with panic, and retail investors rush to sell—that’s when B.N.F.’s opportunity arises. He calmly opens the technical charts, calculates the divergence rate, and judges whether this represents "excessive panic."

If it meets his criteria, he swiftly buys in. Then he patiently waits for the rebound. Once the price rebounds close to the 25-day MA, or if he perceives the rebound losing steam, he sells. He captures the profit from the difference, then moves on to the next target.

To summarize his stock-picking criteria, it’s surprisingly simple:

Prerequisite: Must be a high-volume, actively traded stock in the market.
Core Signal: The stock price has fallen sharply within a short period (a few days), significantly deviating below the 25-day moving average (e.g., dropping over 20%).
Secondary Confirmation: Signs of stabilization start appearing on the candlestick chart.
Operation Logic: Buy the oversold stock, wait for a technical rebound, then sell. Profit from the price difference as the stock moves from "excessive pessimism" back towards "normal levels."

One Crucial Point: This Isn’t for Everyone

While B.N.F.’s method sounds straightforward, it requires immense psychological strength, ironclad execution discipline, and unwavering daily focus—qualities cultivated over years. The average person seeing a stock crash 20% reacts with fear and sells. He, however, can coldly analyze it as an opportunity. This counter-instinctive trading is what the vast majority cannot replicate.

He spends enormous time daily reviewing trades and watching the market. For him, this isn't just investing; it's a full-time job and a way of life.

Hope this explanation helps!