Home > management, Markets, trading > Profitable ETF Trading Strategies: understanding the Japanese market ETF

Profitable ETF Trading Strategies: understanding the Japanese market ETF


The Japanese stock market, the Nissei, is the world’s second-largest equity market in terms of daily dollars traded. Because it is open when the US market is closed it does offer an opportunity to put your dollars to work at different times of the day. 

One of the ways that the short-term trader and they manage of the opportunities found in the Japanese stock market is to trade the ETF symbol: EWJ. This is a broad market index ETF that tracks the Japanese stock market. 

While this sounds like an attractive idea on the surface, it is complicated by the fact that the ETF itself trades with very little volatility during the hours the US market is open. Almost all of the gains and losses associated with symbol EWJ are found at the open and close of the trading session. 

This is because the Japanese market varies only a little when it is closed;  all its gains and losses occur during the time when the Japanese market is open. So the ETF trader is advised not to use symbol EWJ as if it were just another ETF. The gains and losses you would experience with the US market is open are so small as to be almost impossible to trade intraday unless you were to use inadvisable levels of leverage. 

The symbol EWJ can be traded, however by sector recycling systems work by swing trading system or by position trading systems that were to capture macro economic track. It can also be used as part of a broad strategy for asset allocation. Then, EWJ is a cost-effective way of getting exposure to the Japanese markets without having to become an expert in individual Japanese companies or opening an account that they trade directly inside the Nissei.

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  1. June 4, 2009 at 5:20 am

    OHH Some very interesting and insightful thoughts. I like this. ^_^

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