One commonly used strategy among day traders on the ASX is scalping, which involves making numerous small trades throughout the day to capture tiny price movements. Traders often focus on highly liquid stocks such as Afterpay Group Ltd (formerly ASX:APT) or CSL Ltd (ASX:CSL), where there is enough volume and volatility to enter and exit positions quickly. Scalpers rely heavily on Level 2 market data and real-time charts to identify tight entry and exit points. They also use indicators like moving averages, Bollinger Bands, and volume spikes to make precise decisions. Since this method requires speed and discipline, many use direct market access (DMA) platforms for rapid execution.

Another popular strategy is momentum trading, where traders identify stocks that are moving significantly in one direction with high volume. ASX stocks often react sharply to earnings reports, mining updates, or macroeconomic data, giving momentum traders the opportunity to ride these moves for quick gains. For example, a strong production update from a company like Rio Tinto Ltd (ASX:RIO) can trigger a sharp rally. Traders monitor news feeds, technical breakouts, and relative strength indicators (RSI) to catch these moves early. Momentum trading suits those who can act fast and are comfortable taking trades based on short-term news or sentiment shifts. Both strategies require a keen understanding of risk, with stop-loss orders commonly used to limit potential downside.