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Short DAX at 7740
- Thread starter ASusilovic
- Start date
Is the expiry of the DAX index options responsible for spike (obviosuly down) at 1pm?
I was long DAX 4750 and short FTSE 4379 in the night that I covered when GDP news were out but I did not expect recovery of DAX from that bottom.
DAX was going down like meteorit and then it started to rise ... and again it is 4750.
I was long DAX 4750 and short FTSE 4379 in the night that I covered when GDP news were out but I did not expect recovery of DAX from that bottom.
DAX was going down like meteorit and then it started to rise ... and again it is 4750.
Quote from xty:
Brendan............your must be really discipline , not using stop loss for me is like committing murder in texas...........
I also stopped using stops in Fdax long ago. My returns improved a lot. Of course drawdowns because I am not disciplined enough increase. But in average I do much better without stops.
Scalpers can use the whipsaw action in dax for their advantage. It nearly always moves the direction to get most stops, so go opposite side then, most of the times after it hits the stops it changes direction, always good for 5-10 points. Then, it decides wether to resume the initial direction or retrace more.
Never ever trade long if Dax is weak compared to ES after Xetra close, it will even get worse. Same for short but opposite.
The days where you can really make big money are the panic days in Dax. Its important to get a feeling when the Dax is getting in Panic mode (this can happen on long AND short side). You have to get ALL IN in the Panic direction because if Dax is good in something then in proving that falling 200 Dax points is not enough when its possible to make 400 lol.
Then, with the last trade of the day it usually makes sense to take opposite side and hedge with ES.
These are quite low risc trades.
Quote from Topsurfi:
I also stopped using stops in Fdax long ago. My returns improved a lot. Of course drawdowns because I am not disciplined enough increase. But in average I do much better without stops.
Scalpers can use the whipsaw action in dax for their advantage. It nearly always moves the direction to get most stops, so go opposite side then, most of the times after it hits the stops it changes direction, always good for 5-10 points. Then, it decides wether to resume the initial direction or retrace more.
Never ever trade long if Dax is weak compared to ES after Xetra close, it will even get worse. Same for short but opposite.
The days where you can really make big money are the panic days in Dax. Its important to get a feeling when the Dax is getting in Panic mode (this can happen on long AND short side). You have to get ALL IN in the Panic direction because if Dax is good in something then in proving that falling 200 Dax points is not enough when its possible to make 400 lol.
Then, with the last trade of the day it usually makes sense to take opposite side and hedge with ES.
These are quite low risc trades.
Tnks for this analysis..........i had to stop trading directionally on the dax . it just kept breaking my heart. but u guys on this board have really helped my confidence today..............It was a worthwhile holiday for me.
Quote from xty:
Tnks for this analysis..........i had to stop trading directionally on the dax . it just kept breaking my heart. but u guys on this board have really helped my confidence today..............It was a worthwhile holiday for me.
you have to think the following way:
If there is some move in Dax that denies logic (Dax going up without "reason" or breaking down hard although ES holding up) most people think it will get logic again and bet against this move. But its nearly always better to get in the direction of this move because if there is something you don't understand there are more people who don't understand and will end the day with their pants down and have to cover so enjoy the bleeding and be on the right side. Dax can be so cruel. Use it !
A good chart setup is the ES/Dax ratio !
Quote from Topsurfi:
I also stopped using stops in Fdax long ago. My returns improved a lot. Of course drawdowns because I am not disciplined enough increase. But in average I do much better without stops.
Scalpers can use the whipsaw action in dax for their advantage. It nearly always moves the direction to get most stops, so go opposite side then, most of the times after it hits the stops it changes direction, always good for 5-10 points. Then, it decides wether to resume the initial direction or retrace more.
Never ever trade long if Dax is weak compared to ES after Xetra close, it will even get worse. Same for short but opposite.
The days where you can really make big money are the panic days in Dax. Its important to get a feeling when the Dax is getting in Panic mode (this can happen on long AND short side). You have to get ALL IN in the Panic direction because if Dax is good in something then in proving that falling 200 Dax points is not enough when its possible to make 400 lol.
Then, with the last trade of the day it usually makes sense to take opposite side and hedge with ES.
These are quite low risc trades.
this is an excellent post.
i, in all honesty, am a losing trader thus far in the DAX. i've played the stop game and been chopped to pieces. i've played the no stop game and had random unscheduled news events send the DAX 50 points in a heartbeat and eviscerate me (you'd think they'd even out, but i am ALWAYS on the wrong side of these large news moves- and usually carrying more contracts than usual, to increase the pain more). still, every time i use stops i end up being a chump, and, thus, i've concluded that they're not a good tool with the DAX.
couple questions:
1. what is your ratio when hedging with the ES?
2. how do you contend with/handle your exits when things are going against you? i ask this because i find exiting losing positions more difficult in the DAX than any other contract i've traded. stops can get mad slippage. without stops, i find myself putting in limit orders several points away from market because when i try to get cute when the DAX is making a run, i often don't get executed and then have to chase. net net is that i often find the gap between deciding to get out and getting out to often be in the 10 point range due to the way the DAX moves- obviously, this really compounds my loses. there's no such thing as a small loss in the DAX if i'm being disciplined and pulling the plug on trades without the ole' limit order at break even and pray' approach which can be lethal.
Quote from Topsurfi:
you have to think the following way:
If there is some move in Dax that denies logic (Dax going up without "reason" or breaking down hard although ES holding up) most people think it will get logic again and bet against this move. But its nearly always better to get in the direction of this move because if there is something you don't understand there are more people who don't understand and will end the day with their pants down and have to cover so enjoy the bleeding and be on the right side. Dax can be so cruel. Use it !
A good chart setup is the ES/Dax ratio !
Thanks again............the es/dax chart realtime has eluded me. couldnt get dax realtime datas so have to do it manually.. i use this for my quant strategy...........any idea on realtime dax data that can feed through to xsheet
Quote from gangof4:
i, in all honesty, am a losing trader thus far in the DAX. i've played the stop game and been chopped to pieces. i've played the no stop game and had random unscheduled news events send the DAX 50 points in a heartbeat and eviscerate me (you'd think they'd even out, but i am ALWAYS on the wrong side of these large news moves- and usually carrying more contracts than usual
maybe you have an asymmetric exit strategy. You have to work on that. Maybe if the news event is on your side you will cover after you got 10 points and if it runs against you are not reacting fast enough but just watching until the pain gets to big.
If you don't use stops it is crucial to exit if you feel something is not running OK for you. If you are really good, you can exit before it hits your "mental" stop.
I don't even use mental stops any more because I want to react on the way it trades, in some cases I would even add more contracts if I still think I am right (dangerous but I do it) and in some cases I scratch the trade long before the pain begins because I know deep inside that it will not work anyway.
The difficult thing in trading is allow your intuition to work for you (its better than ANY system and computer) but don't allow bad emotions to influence you to much. This is the balance you have to fight for, not easy. I needed years for that.
Most people fail here and begin to look for pure mechanical systems with hard profit targets and stops and they will always fail because there are no such systems that work consistently.
The really important thing about Dax is that it is a very agressive thing to trade and you can only trade it calm and relaxed if you use an account of minimum 30.000 Euro per Fdax. At least this is my personal margin to trade it with the necessary personal distance. Otherwise I get to emotional with all the bad things involved (stick to loosers etc.)
Quote from gangof4:
couple questions:
1. what is your ratio when hedging with the ES?
depending if my bias is for more hedging or less hedging I use 3 to 4 ES per Dax.
Quote from gangof4:
2. how do you contend with/handle your exits when things are going against you? i ask this because i find exiting losing positions more difficult in the DAX than any other contract i've traded.
if it is not moving fast and I want to get out I use a limit order that is maybe 2 points better than currently trading and hope the fluctuation get my order filled.
If it does not work well I exit Market. I may be wrong but my feeling is that I get a better fill frequently if I exit market than by using stop-limit orders. But this is just feeling, no hard evidence.
Quote from gangof4:
when i try to get cute when the DAX is making a run, i often don't get executed and then have to chase.
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if it is really running, exit market. Yes, it hurts sometimes but 99% of the time dax is only whipsawing. I make my money on whipsawdays and the panic days. I am not that good in "normal" trend days where most other traders might perform better.
You have to find what suits you and limit your losses the other time.
Another really bad behaviour I had in the beginning was to move the stop to break even so I could not lose any more on a given trade. Dax always came back, took my stop and then continued in my direction.
So the final stage of trading is using NO stops or fixed targets but let the market behaviour show you where to exit. Because otherwise you throw away an important part of information that you can only get AFTER your entry has been executed. Also here you have to let your intuition be your guide. You are a good trader if you have parts of your brain under control that you normaly not even use.
Hmm, sorry that was a long one. My english is not that good and I hope you understand what I wanted to say. Trust your intuition but stop emotion. Thats so difficult because its the same part of our brain. I whish there could be exercises for that. Only if you reach this level, you will be a good trader.
Trade SMALL, because only then you can control the emotional part. If money is important to you, you will never be able to suceed.