Recently, I’ve seen many discussions about next-day trading, a type of short-term operation, and indeed, there are many stories of making big money in the Taiwan stock market. I’ve also observed for a while and want to organize some practical ideas.

Next-day trading, simply put, is buying stocks or warrants on the same day and selling them the next day, using overnight price fluctuations to profit from the difference. Compared to the typical buy-and-hold approach, this method can quickly generate profits in a shorter period, especially during strong market trends.

I’ve noticed that the most common tactic in next-day trading is the “lock-limit-up strategy.” Large investors will seize major positive news about a stock to push an already rising stock to the limit-up price, attracting a lot of chasing buyers. Since the buying pressure isn’t fully satisfied, the stock usually opens significantly higher the next day, which is a good exit point. For ordinary investors, the idea is to catch this high-probability move, closely monitor market fluctuations, and set price alerts. For example, if the limit-up in Taiwan stocks is 10%, you can filter stocks that rose more than 7.5% that day, then judge whether to follow based on news impact, speed of rise, trading volume, and whether the technicals show oversold conditions.

Another way to do next-day trading is through warrant trading. When a large amount of capital buys warrants, the issuer will hedge by buying the underlying stock, pushing up the stock price. Next-day traders can then sell both the warrants and the stock for profit.

One of the most memorable cases I recall is Tenquan (4967). Around 10 a.m. on November 2, 2023, the stock was priced at 85.5 NT dollars, a 7.5% increase. At that time, September revenue was 1.48B NT dollars, up 16.47% month-over-month and 113.10% year-over-year, hitting a new monthly high. Trading volume was significantly higher, and the news was substantial, fully meeting the conditions for next-day trading. If bought at market price then, the stock hit the limit-up by 10:20 a.m., and the next day it gapped higher to 92.2 NT dollars, earning a 7.8% profit in just one day.

Next-day trading and day trading are not very different; mainly, it’s about holding time. Day trading involves entering and exiting within the same day, while next-day trading involves selling the next day. Day trading demands high trading speed, whereas next-day trading gives you more reaction time but involves overnight risk.

When doing next-day trading, you must pay special attention to several risks. First is market sentiment risk—since the stock market is inherently volatile, even correct judgments can lead to miscalculations. Second is information risk—you must constantly monitor market news and fundamental changes. Most importantly, overnight risk—if adverse news emerges overnight, you can’t hedge or stop-loss effectively. Therefore, before entering, assess your risk tolerance and develop a solid trading plan.

My advice is to use technical analysis tools to study price trends, monitor major fund flows, and pay attention to the relationship between price and volume. Set stop-loss levels, control the size of each trade, and avoid over-concentration. The concept of next-day trading can also be applied to futures, CFDs, and other products; diversification can increase success rates.

Honestly, next-day trading is a short-term operation, and the market may not always be perfectly rational in the short term. Investors need the mental resilience to handle volatility calmly and the flexibility to adjust strategies as needed. Know your limits, avoid blindly following the crowd, and this is key to long-term stable profits. If you’re interested in this kind of short-term trading, you can start practicing on Gate or other platforms. Small-scale testing is the best way to learn.