Are you a new stock trader looking to get started in Japan? Are you curious about the Japanese stock market, what strategies will help you succeed, and how best to manage your investments? Look no further. In this article, we’ll discuss all the essential information that any newcomer should know before entering the world of Japanese stocks — from understanding which markets are available to select brokers.
Whether you’re already considering trading or still on the fence about getting involved with stocks, here is everything to know for a successful journey as a trader. So, what are you waiting for? Let’s explore all that this fascinating industry has to offer.
Table of Contents
What Markets Are Available To Japanese Traders?
The most popular market for Japanese traders is the Tokyo Stock Exchange (TSE). It’s the largest stock exchange in Japan and contains over 3,500 domestic and foreign stocks. In addition to the TSE, several other markets are available, including the Osaka Securities Exchange (OSE) and Jasdaq Growth Market.
Another market to consider is the Nikkei 225, which tracks the performance of 225 Japanese companies and indexes. Traders may also succeed in foreign stock exchanges like the New York Stock Exchange or NASDAQ.
What Are The Differences Between Them?
The Tokyo Stock Exchange and the Osaka Securities Exchange are the two largest markets in Japan. The TSE is home to over 3,500 stocks that trade in Japanese yen, and it’s well known for having a wide range of securities from domestic and international companies. It is also the first exchange in Japan to offer ETFs and REITs.
On the other hand, the OSE is home to fewer stocks than the TSE — only about 1,200 domestic equities — but it has more specialized trading options available. It also offers derivatives and commodities trading in addition to securities.
Nasdaq Growth Market is a market explicitly catering to start-ups and small-medium-sized companies. It allows these businesses to raise capital more efficiently as it has minimal listing requirements and regulations. Its stocks are available at lower prices than the other two exchanges.
How To Select A Broker?
When selecting a broker, it’s essential to remember that the cost of trading can vary widely depending on the market and provider. Some brokers may charge an account opening fee and a commission for each trade made, so it’s essential to do your research before committing to any particular brokerage. Look into how each broker’s fees and trading costs compare and what customer service they offer.
In addition, you’ll want to ensure that the broker you choose provides access to the markets and securities you plan to trade. Some brokers may offer access to Japanese markets, while others may only provide access to foreign exchanges. Be sure to check what trading platforms and tools are available through each broker — such as charting software or a mobile app for easy monitoring of your investments. You also want to make sure that a broker is credible and reputable, as you will be entrusting them with your funds. One example of a popular and reputable broker would be Saxo Bank.
What Strategies To Employ?
When trading in the Japanese stock market, developing an effective strategy that works for you is crucial. Some strategies may include fundamentals-based investing, technical analysis, or even short selling — each of which requires a different approach and set of skills.
Fundamentals-based investing involves researching a company’s performance and financials and making decisions based on that information. Technical analysis, meanwhile, involves analyzing past price and volume data to try and predict future market trends. And short selling involves taking a bet against a company’s stock performance by borrowing and then selling the security in hopes of being able to repurchase it at a lower price later on.
It’s also important to remember that strategy is not fool proof, and losses can still occur. So, it’s best to diversify your investments, be aware of the risks involved, and maintain a well-balanced portfolio that works for you.
Market Analysis Techniques?
To better understand the Japanese stock market, traders should consider using various market analysis techniques. One such technique is technical analysis, which involves studying past price and volume data to predict future trends. Fundamental analysis is also essential — researching a company’s financials and making decisions based on the information provided.
It’s also important to monitor news and other external factors that could affect the market. It includes macroeconomic data such as GDP growth, inflation, and interest rates, as well as company-specific news such as earnings reports or shifts in management.
Different Types Of Orders?
When trading in the Japanese stock market, several orders can be placed. A market order is an order to buy or sell a security at the current price. A limit order sets a maximum or minimum price for when to execute a trade — so if the market reaches the specified price, the order is filled. A stop-loss order is an order to sell a security if it falls below a specific price point — this helps limit losses in the case of market downturns.
Finally, an iceberg order combines several smaller orders into one large order — so only part of the total order is visible to other traders.