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What is the best DAX 30 Trading Strategy?

We have been successfully trading the DAX live in our live trade room since starting the room in 2013. Here we will show you the best DAX 30 Trading Strategies that have generated consistent profits for our Live Trade Room Members over the last few years.

What is the DAX 30?

The DAX 30 is the premier index of the German stock market – the Frankfurt Stock Exchange. The index is the amalgamated stock prices of the top 30 companies and includes big, world-renowned brands such as BMW, Allianz and Adidas. On spread bet and CFD brokers the DAX may be also be called Germany 30, GER30 or DE30.

Why do you care? Because the DAX 30 is incredible to trade and there are lots of professional traders who make their living just from trading it!

We love the DAX 30, we trade it all the time and in this guide we are going to share our vast experience with you in this article.

DAX 30 trading strategies

There are two general market types we need to have DAX 30 trading strategies for:

– Trending markets

– Sideways markets

The DAX 30 goes through periods of both sideways and trending markets, and when it does, it presents lots of trading opportunities for us. There are three trading strategies that we use on the DAX 30 all the time. These are swing trading strategies, breakout trading strategies and scalping.

All three of the strategy videos below use live DAX examples we traded for real in our DAX live trade room (more of that below). These are the DAX 30 trading strategies that work!

These will cover you from being in the market for minutes, to being in the market for hours, days and even weeks. So regardless of your circumstances (whether you work 9-5 etc), we have you covered.

DAX 30 swing trading

Number one of three of our DAX 30 trading strategies:

We believe that swing trading strategies work very effectively on the DAX and that there are several monster trades available every year that can generate thousands in profit and provide a solid financial foundation for your trading. This is especially true when the market has been down trending / risk off because that usually means, with indices, that any sell-off precedes a rally.

Look at the chart above, at the end of December the market had sold off. In January the market started to recover and there were technical signs the market was going to recover and rally. Our swing trading strategy enabled us to ride a lot of this recovery which was one of the trades that got our year off to a superb start.

There’s nothing better for a trader’s confidence than to have a really strong start to the year.

Click to view Swing Trading Strategy Video on YouTube[/caption]

DAX 30 breakout trading

Number two of three of our DAX 30 trading strategies:

The DAX 30 is incredible for breakout trades. It is similar to the Dow Jones Industrial Average in this respect – perhaps because they both contain 30 companies helps.

Breakouts are more tricky on Forex. Forex tends to ‘fake-out’ (where the level enters a new zone then fades back in) more than it does on indices. This is a reason why a lot of Forex traders do not like breakouts.

If you don’t trade indices, then you really should start doing so and look to trade breakouts. There are so many occasions when the market will enter a new trading zone and simply ‘lift off’ from there. The same is true when the breakout is short. When there is a down trending, ‘risk-off’ environment on indices, the moves tend to be faster with greater momentum.

View breakout trading strategy on YouTube — Click to view breakout trading strategy on YouTube

DAX 30 scalping strategy

Number three of three of our DAX 30 trading strategies:

If you have the time, availability and focus then the DAX 30 is one of the best trading instruments to scalp. One of the reasons for this is because of the high index value and generally low spreads available. This makes it ideal for scalping.

The cost of trading is only one aspect. The market still needs to be ‘scalpable’. Fortunately, the DAX 30 is extremely technical even with small moves that are suitable for scapling. It really works well off support and resistance, pivots and round numbers. If you want to look for a reversal scalping technique then take a look at the video below (it’s an hour long so you’ll need to dedicate some time!).

Click to view our Scalping Trading Strategy on YouTube

Why trade the DAX 30 index?

So why should you consider trading the DAX? There are so many different markets out there you could trade, why does the German stock market deserve your attention and trading effort?

As a trading team, we have watched the DAX 30 for thousands of hours and we trade it for real in our Live Trade Room everyday. When you have watched a market for so long, you get to know its personality and nuances.

It is very technical

By technical, we mean it repeats predictable and consistent patterns that we can use to trade and make profit from. That is essential for any market we wish to trade.

Whether that be swing trades, breakout trades, scalping or any other strategies, the DAX 30 can provide the platform for all of those strategies.

A reliable technical trading instrument allows us to draw a regular source of income and supports us trading with confidence.

It has a high index value and good volatility

The DAX 30 consistently has excellent, manageable volatility. Naturally, sometimes it becomes extreme, either where nothing happens or where the volatility becomes so great the market becomes too risky to trade. In my experience, of watching this market for thousands of hours, the DAX remains highly tradable most of the time.

‘Black swan’ events are less likely on indices

A black swan is an event or occurrence that deviates beyond what is normally expected of a situation and is extremely difficult to predict. An excellent example being when the Swiss Central Bank ‘unpegged’ their currency, the Swiss Franc, against the Euro.

Not a move you wanted to be on the wrong side of!

The point here is that indices are less exposed to those sort of horrific, unpredictable moves because there are many companies making up the index value you are trading. So if one company experiences a ‘black swan’ event, then it is absorbed by the other companies.

It loves support and resistance

We consider support and resistance to be the foundation of trading. The DAX 30 sets really strong support and resistance levels that can be used in a multitude of ways. They can be used to trade directly off for reversal strategies and breakout strategies, as well as used to set profit targets and place stop losses above / below to give a trade the best chance of success.

Long swing trades

Historically, indices go up more than they go down.

See.

This is because indices are made up of stocks. What do the people who run these companies aim to do? They aim to make money and succeed. What happens if they do this? The value of the index rises. The investors who buy the stocks want them to increase in value. They want the value of their holdings to increase and they want to be able to draw dividends. This is different from forex, commodities and other asset classes.

This means indices go up more than they go down and whenever there is a sell-off / risk-off period in the market, there will be a great opportunity to get long.

All the above DAX 30 trading strategies support entries to get long.

DAX trade room

We have been running the UK’s premier trade room since 2013. No hiding behind expensive courses, Instagram posting or ‘hindsight’ entries. We have taken thousands of live trades in front of thousands of aspiring traders. If you want to find out more about our trade room then you can click here.

The best way to teach aspiring traders is to take live trades in front of them. It’s easy to look at a chart in hindsight and say, “You could have gone long there or short there” etc. Hindsight advice like most trading education.

As a trading team, we have watched the DAX 30 for thousands of hours. When you have watched a market for so long, you get to know its personality and nuances.

Other things to know

Here are some other things we think you should know if you are trading / looking to trade the DAX 30.

A chart showing the DAX cutting off trading hours.

Different types of DAX 30

You should be aware the DAX has two versions. One is the performance index and the other the price index. The difference between the two is whether or not dividends are counted. The performance index is usually the quoted number. The reason I mention this is that if a broker has an unusually price it may be because the different version of the german stock market is being quoted, rather than an error that presents an arbitrage opportunity (where there’s a ‘risk free’ opportunity with pricing disparity).

Don’t look at out of hours data

When looking at S&R levels, don’t use out of hours data. Unlike forex, indices aren’t open 24 hours. They are open set hours (obviously depending on your time zone).

For us in the UK, the DAX 30 is open between 08:00 and 16:30. Brokers however use algorithms to create a 24 hour market. The data created by these are not ‘real’ because there are no actual stocks / equities trading. There is no trading volume on the DAX 30 when the market is shut. That means we are not interested in any of the “out of hours” market data for our decision-making / any technical analysis like pivot placements.

Don’t trade bank holidays

When there’s a bank holiday in Germany, just don’t even bother trading the market. The volumes will be low, the moves unpredictable and the strategies you have less likely to work. For us, the same applies to when there are bank holidays in other major parts of the world like the UK and USA. We don’t trade when they are off, either.

Do something nice on those days. The market will always be here and sometimes doing nothing is the most important thing in trading, which seems perverse, but it’s true.

The best broker for trading the DAX 30

Both spreads and traded executions are important when trading the DAX 30.

The broker we use in our live trade room, Markets.com, offer a 0.8 spread on the DAX and solid executions. These tighter spreads add up in the long-term, especially if you’re frequently trading / a day trader.

(To get the MarketsX spreads make sure you select the ‘MarketsX’ at the top to take you to the page below:

An image showing the spread differences on the DAX between brokers.

Conclusion

You may have guessed, we really like using the DAX 30 trading strategies we have written about in our DAX 30 trade room.

We feel that any professional trader or aspiring trader should be trading the DAX alongside whatever else they are trading. If you haven’t tried it yet, why not? We think you’ll find it highly consistent and technical no matter if you are a day-trading scalper or longer-term swing trader.

The more markets you learn to competently trade, the more profit you can make – and that’s why we all trade, don’t we?

Learn to Trade Profitably

How our Live Trade Room Teaches you to be profitable

Which Trading Strategies Make the Most Money

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