Day trading strategies and techniques to use in Asia

Stock trading means buying and selling companies’ stock to profit through changes in market prices. To be successful at day trading, one must learn technical analysis and understand how current news affects price movement. You can trade different types of stocks, including:

  • Penny stocks which typically have low liquidity and price per share under ¥5, options on individual securities where bets are placed on call/put options that pay off if the underlying security goes up or down within a given timeframe (e.g., 8-12 months),
  • Futures involving contracts from commodity producers to those who sell them at a future date and settled by money (same as cash, but settlement is in the future)
  • Exchange-Traded Funds are like mutual funds but trade like stocks.

The market comprises buyers and sellers that determine prices based on supply and demand. The prices of shares traded go up or down depending upon fluctuating demands for those shares. You can view a list of available stock at Saxo Hong Kong. There exist many trading strategies to take advantage of changing price movements. Knowing these techniques can help you to make money day trading stock purchases.

Day trading high-priced stocks

Stocks ranging between ¥20 and ¥100 are considered high priced. They may seem like risky investments, but significant gains can occur over a short period because the swings in price movements are more pronounced than with low-priced stocks.

Day traders capitalize on these fluctuations by buying shares at one price point and selling them at another within the same day. High priced stocks are used for extended periods with little liquidity to support active trading volume.

Using this strategy correctly requires continuous monitoring of market updates that may affect prices. It is essential to pay attention to regulation announcements, earnings reports, upcoming or ongoing company events, or any other activity that can impact share price daily.

Day trading penny stocks

Penny stocks are low-priced securities trading at ¥5 or less. These could be startup companies looking to attract investors for funding, established companies that have fallen on hard times, or may even be scams used to take advantage of people who don’t know any better about how penny stock trading works.

Penny stocks are particularly attractive to day traders because they are very volatile and therefore produce considerable gains in a short period. However, if you can’t get out fast enough, the risk is enormous since it only takes one negative news article to wipe out your investment entirely. Penny stocks are traded using strategies similar to selling short or naked put writing.

Trading futures using technical analysis

Futures are used to sell or buy items at a future date and delivered upon settlement of the contract. It applies to all sorts of goods, including but not limited to agricultural commodities, metals, food products, and other physical objects. However, traders can also use futures contracts for financial assets like bonds and stocks. For this reason, it is possible to buy or sell an index or equity using these same principles that apply when trading gold or pork bellies. The futures market works by opening positions in buyer-seller agreements that will be closed out later with a deal about how much money will change hands based on the rate at which the assets have appreciated or depreciated at the time of settlement.

Using technical analysis to buy exchange traded funds (ETFs)

The advantage of using ETFs is that they are traded just like individual common stock but have some unique characteristics. For example, you can buy fractional shares that represent a portion of the fund’s assets while also maintaining liquidity. You can sell short or go long on ticker symbols representing an entire company’s index rather than one security within that index. Performance-based losses are sometimes capped depending on how related securities perform, which can help protect your downside risk.

Through options contracts, traders can get exposure to ETFs with greater degrees of precision. For example, buying call options gives the trader the right to purchase a particular ETF at a specified amount on or before a specific date. With different strike prices and expiration dates, you can exchange these rights to give traders more opportunities for success when trading ETFs.