DAX daytrading Strategy

eggs · Nov 14, 2003

Quote from NUTSNEAL:

I will post the text and then post the chart.

I just typed my response tried to attach the chart, which was too large and lost my text, so chart will follow.

I would consider an early warning that the current uptrend might be losing strength to be the earlier divergence (the black trend lines on my chart). Then much like the earlier example when the stochastic crossed above 75 (below 25 in the earlier example) and turned down (see arrows), I would exit when the price broke below the candle or bar which made the high in the stochastic.

But I would not consider I was in a down trend until the long red candle about 3:15 which took out the lows in the middle of the chart making lower lows indicating to me we now are in a downtrend on this time frame.

Then moving to the right to about 3:45 when the stochastic went above 75 and turned down I would get short as soon as the price broke below the candle making the high in the stochastic.

What time frame is this chart and what is the symbol. I don't trade the dax but I have found this method to work on almost anything I have ever traded. I really like your method of entering on counter trend moves and have found it to work really well. Also one thing I also often use to help me identify the trend (besides to obvious trendlines) is a little longer (smoother) moving average. A lot of times you can get an early warning that the current trend is ending with the slope of this moving average.
With this it really helps to be familiar with the past behavior of the instrument you are trading.

Also, when I am looking for a divergence I like to see a reasonable slope to both of them. I really don't want either of them to be horizontal. Although it does indicate a divergence I don't think it is nearly as accurate.

Good luck!

Again, thanks for posting your charts.

Hopefully I will be able to get the chart to upload.

Still trying to upload chart!

Hi Nutseal,

Thanks for your response !
The time frame is 1 min and the symbol is GB Z3-DT. That's the famous german bund here in Europe.
German bund is trending very well. I think my strategy can be applied on it.
If you have more questions regarding european instruments, don't hesitate to ask questions !

Cutten · Nov 14, 2003

The Dax (and Eurostoxx) today provided an excellent breakout through a level (3771.5, the prior day's close) at 9:47-48 CET. Then in the afternoon there was a good opening range breakout on the US open, with an obvious exit point a minute or two before the U Michigan figure at 1550. This was followed by a "buy the rumour, sell the news" trade on the U Michigan Confidence figures at 15:53 CET (i.e. the market rallies on a bullish figure, then starts selling off, and then makes a break below the pre-figure price level).

eggs · Nov 14, 2003

Quote from Cutten:

The Dax (and Eurostoxx) today provided an excellent breakout through a level (3771.5, the prior day's close) at 9:47-48 CET. Then in the afternoon there was a good opening range breakout on the US open, with an obvious exit point a minute or two before the U Michigan figure at 1550. This was followed by a "buy the rumour, sell the news" trade on the U Michigan Confidence figures at 15:53 CET (i.e. the market rallies on a bullish figure, then starts selling off, and then makes a break below the pre-figure price level).

Cutten,

I agree. I entered the trade at 3769 and exited at 3799 for a 30 pts win. Good trading day today on DAX
ARe U a DAX or Stoxx trader based in Europe ?

electron · Nov 15, 2003

Quote from eggs:

doug,

I use Keltner bands 20 ema. In fact I papertrade this strategy for 4 weeks now and it seems very profitable. The setup is clear and the risk/reward is 1.5/1 on average with a 70% win rate but you must be in front of your screen all day long anf be very very patient.

Keltner bands can be used also as target. I like the setup when keltner band is pierced with a pullback around the 20 ema. Seems to be very powerful.

For real trading I use a 30 min breakout system. My stop is always 15 pts and my target is 30 pts. I move my stop to BE when 20 pts are reached. The win rate is 50%.
The average daily range on DAX is +/- 80 pts. I average 150 pts/mont with 1 contract.

Good trading !

This is a well known strategy, used to work pretty well in eminis, not so much anymore as eminis do not trend that well as before, still applicable to ZB as I noticed it recently, but almost everything I tried works well on ZB, anyway. I mentioned it here briefly long time ago, that was the first profitable strategy that I learned from a friend of mine who is an accomplished trader.

I used it in a 3 min time frame in ES, I can still use it for ES in 5 min TF with some variations for the entry trigger: sometimes it is indeed a return to the 20 MA, but sometimes you just need to go with the trend on a breakout. This was the case this past Friday where there was no pullback to the 20 MA, but the bottom just gave in.

Anyway, how much do you make in terms of $$ per month per contract using this strategy, because I don't know what dolar values I should assign to points in DAX.

BTW, is it true that European futures exchanges charge cancelation fees?

What is the width of your KC?

BKuerbs · Nov 16, 2003

Quote from electron:

.......

Anyway, how much do you make in terms of $$ per month per contract using this strategy, because I don't know what dolar values I should assign to points in DAX.

BTW, is it true that European futures exchanges charge cancelation fees?

........

The FDAX is quoted in 0.5 points = 1 tick worth 12,50â¬. So one full point equals 25â¬.

The Eurex exchange (where the FDAX is traded) charges a cancelation/modification fee in an attempt to somewhat limit automated trading. The model they use is different from the one IB uses.

IB charges their customers 0,50â¬ per cancellation/modification of an order, no matter how many contracts you trade. On the other hand, you get a credit of 2,50â¬ per executed order. So for each round-turn you get a credit of 5,00â¬. This means you may modify your orders 10x before you have to pay a fee. For a retail trader, trading manually, this should be enough. Though on some days, you still end paying some â¬-cent.

In spite of what the IB-site says, the execution credit is applied across tickers trading on Eurex, e.g. a credit earned for trading FGBL is balanced against fees for canceling FDAX-orders (though they may change this). The credit is not carried over-night, i.e. you start each day with 0â¬.

Regards

Bernd Kuerbs

electron · Nov 16, 2003

Quote from BKuerbs:

The FDAX is quoted in 0.5 points = 1 tick worth 12,50â¬. So one full point equals 25â¬.

The Eurex exchange (where the FDAX is traded) charges a cancelation/modification fee in an attempt to somewhat limit automated trading. The model they use is different from the one IB uses.

Regards

Bernd Kuerbs

Thanks for your info. 1 euro is about 1 dollar so, that would be about $3000 per contract per month using this strategy. Not bad at all, better than what you can expect in ES.

I use mostly market orders, so I guess the cancelation fees would not affect me, but it's good to know that this is not as bad as I thought.

I will look into DAX. What's the best trading time for this futures? First two hours? How long is the daily session? When does it start? What's its ticker symbol in IB?

Best,
electron

almotor · Nov 16, 2003

Electron,

i hope u dont live in the US - or if u do, u d better be a night person................

Dax starts trading at 3am EST until 2pm EST ( although there is something about shortening the closing times!?!)-

i would say, the best hrs are the first 2 hrs or so, or when the US opens, but then it will follow the US indicies..............

it is a heavy conract , since each point is 25 â¬ ( about $29)- and so at a 4â¬ comms with IB, u can even do scalping..............

The daily range has really dropped............Jan/Feb last yr it had an average range of 100 pts- now down to about 55/60 !!

Anyway..................hope this helps ( can u pm me pls)-

Al

electron · Nov 16, 2003

Quote from almotor:

Electron,

i hope u dont live in the US - or if u do, u d better be a night person................

Dax starts trading at 3am EST until 2pm EST ( although there is something about shortening the closing times!?!)-

i would say, the best hrs are the first 2 hrs or so, or when the US opens, but then it will follow the US indicies..............

it is a heavy conract , since each point is 25 â¬ ( about $29)- and so at a 4â¬ comms with IB, u can even do scalping..............

The daily range has really dropped............Jan/Feb last yr it had an average range of 100 pts- now down to about 55/60 !!

Anyway..................hope this helps ( can u pm me pls)-

Al

Thanks,

I am a night person and since I live in California that would not be a problem for me (DAX opens here at midnight), I could trade it till the bonds open here (at 5:20 AM PT) and then do some 1-2 hours of bonds and go back to bed. Getting up at 5 AM here to trade bonds and then ES has been killing me, trading DAX and ZB could be a better idea, even though I have just got well adjusted to small ranges in ES.

I will PM you.

Baruch · Nov 16, 2003

If you want less risk you can trade the Eurostoxx50 future.

Boomer · Nov 16, 2003

Quote from electron:

Thanks,

I am a night person and since I live in California that would not be a problem for me (DAX opens here at midnight), I could trade it till the bonds open here (at 5:20 AM PT) and then do some 1-2 hours of bonds and go back to bed. Getting up at 5 AM here to trade bonds and then ES has been killing me, trading DAX and ZB could be a better idea, even though I have just got well adjusted to small ranges in ES.

I will PM you.

how would you compare the es and zb. i have been doing es, but would llike to look into the zb. could you give some of your thoughts on it. thanks.