The winning strategy during the Asian session - 12.10.2018

After the second wave of sales on Wall Street, it is almost certain that the negativity will be shifted to Asia. In that case, it is good to focus on the major Asian indices, Hang Seng, ASX200, Shanghai composite and Nikkei 225. I expect JPY also to receive support during the Asian exchange session, but the strong volatility will increase the risk significantly.

Futures on the Asian markets indicate a positive start of the session, but Wall Street sells will surely have an impact, and ultimately, the likelihood of Asia shutting down is still high. In fact, the situation provides very good levels for the shortening of Asian indices. In addition to Wall Street negativity, we are also expecting China's trade balance data. Expectations are for a sharp drop of 30% over the previous period. From a historical point of view, the downward trend in trade balance is not coming soon, coupled with US trade tariffs will continue to have a negative impact on Chinese stocks and hence on the entire Asian region.

If the forecasts are as expected or lower, I expect the sell-offs to be tightened and the JPY to be supported.

During strong sell-offs and index gaps, we should focus on less time to get the most out of the price movements. For Intraday trade, it is a good idea to wait for the formation of a daily local maximum, and then position it with a short to the end of the session.

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