This article will provide a beginner’s guide to positions trading in Japan. It will include an overview of the Japanese stock market and an overview of the types of trades that are available. Finally, we will provide some tips for beginner traders looking to start positions trading in Japan.
The Japanese stock market is very sophisticated and one of the largest globally. It offers investors a wide range of opportunities. Japan’s two primary exchanges are the Tokyo Stock Exchange (TSE) and the Osaka Securities Exchange (OSE).
The TSE is by far the larger of the two exchanges, with over 2,700 listed companies and a total market capitalization of over $5 trillion. The OSE has around 1,300 listed companies and around $2 trillion market capitalization.
There’s a wide range of different types of trades available on the Japanese stock market. The most common type of trade is a buy order when an investor buys shares in a company hoping that the stock will increase in value over time. A sell order is when an investor sells shares in a company with the hope of making a profit if the stock price falls.
Another common type of trade is a short sale. When investors sell shares in a company they do not own, they hope to buy back shares at a lower price and profit. Short selling is often used by investors who believe that a stock is overvalued and is likely to fall in price.
Buying put options or selling call options
Finally, there is buying put options or selling call options. A put option gives the buyer the right to sell a stock at a specific price, while a call option gives the buyer the right to buy a stock at a specific price. These types of trades are used by bullish investors on a stock (they believe it will increase in value) but want to protect themselves against potential losses.
If you are looking to get started in positions trading in Japan, here are some tips to help you get started:
Do your research
Before investing in any stocks, it is essential to research and understand what you buy. Please read up on the company, its products and services, and financials.
When you are starting, it is best to start small. Investing a large amount of money into stocks that may not perform well can result in capital loss.
Diversify your portfolio
Investing in various stocks will help minimize your risk if any one of them performs poorly. You can also invest in other financial products like FX or commodities to further spread your risk.
Use limit orders
It’s an order to buy/sell a stock at a specific price or better. Using limit orders can help you get the best price possible on your trades.
It is crucial to stay disciplined when trading stocks. It means not overreacting to market news and sticking to your investing plan.
Use stop losses
It is an order to sell a stock if it falls below a specific price. It can help you protect your capital if the stock price drops suddenly.
Stock markets can be volatile, and it may take some time for your investments to pay off. Stay patient and stick to your investment plan, and you will be more likely to achieve success.
Use a broker
A broker, like Saxo, can help you execute your trades and provide valuable advice on which stocks to invest in. Brokers charge a commission for their services, but it is well worth the help and guidance you will obtain.
The Japanese stock market offers investors a wide range of opportunities, whether you want to buy stocks, sell stocks, or trade options. If you do your research and follow these tips, you will be well on your way to successful positions trading in Japan.
If you have never traded before, we strongly advise paper trade first. It merely means you register a demo account with a reputable broker and test your skills, analysis and strategies before making a cash investment.