DAX GER 40 Index
DAX 40 brokers offer access to the forty largest, blue-chip German trading companies found on the Frankfurt Stock Exchange. As Germany sits as the largest and most powerful economy in the Eurozone, the DAX (Deutscher Aktien index) is regarded amongst the most important indices for European investors.
This tutorial will break down how the DAX works, detailing its purpose and implications. It will also explain how to start day trading on the DAX, including how to compare brokers and platforms, plus information on signals, market opening hours, analysis, and strategy, as well as top tips. Use our list of the top brokers with access to the DAX 40 to start trading.
DAX 40 Brokers
These are the 5 best brokers for trading on the DAX GER 40 Index:
#1 - Pepperstone
Why We Chose Pepperstone
Established in Australia in 2010, Pepperstone is a top-rated forex and CFD broker with over 400,000 clients worldwide. It offers access to 1,300+ instruments on leading platforms MT4, MT5, cTrader and TradingView, maintaining low, transparent fees. Pepperstone is also regulated by trusted authorities like the FCA, ASIC, and CySEC, ensuring a secure environment for day traders at all levels.
"Pepperstone stands out as a top choice for day trading, offering razor-sharp spreads, ultra-fast execution, and advanced charting platforms for experienced traders. New traders are also welcomed with no minimum deposit, extensive educational resources, and exceptional 24/7 support."
- DayTrading Review Team
- Instruments: CFDs, Forex, Currency Indices, Stocks, Indices, Commodities, ETFs, Crypto, Spread Betting
- Regulator: FCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB
- Platforms: MT4, MT5, cTrader, TradingView, AutoChartist, DupliTrade
- Minimum Deposit: $0
- Minimum Trade: 0.01 Lots
- Leverage: 1:30 (Retail), 1:500 (Pro)
Stock Exchanges
Pepperstone offers trading on 22 stock exchanges:
- Australian Securities Exchange (ASX)
- CAC 40 Index France
- DAX GER 40 Index
- Deutsche Boerse
- Dow Jones
- Euronext
- FTSE UK Index
- Hang Seng
- Hong Kong Stock Exchange
- IBEX 35
- Japan Exchange Group
- Korean Stock Exchange
- London Stock Exchange
- Nasdaq
- New York Stock Exchange
- Russell 2000
- S&P 500
- SIX Swiss Exchange
- Shanghai Stock Exchange
- Shenzhen Stock Exchange
- Taiwan Stock Exchange
- Toronto Stock Exchange
Pros
- Award-winning customer support is available via telephone, email or live chat with response times of <5 minutes during testing.
- Pepperstone boasts impressive execution speeds, averaging around 30ms, facilitating fast order processing and execution that’s ideal for day trading.
- Pepperstone emerges as a low-cost broker, especially for serious day traders with spreads from 0.0 in the Razor account and rebates of 25%+ through the Active Trader program.
Cons
- Pepperstone’s demo accounts are active for only 30 days, which may not be not long enough to familiarize yourself with the different platforms and test trading strategies.
- Pepperstone does not support cTrader Copy, a popular copy trading feature built into the excellent cTrader platform and available at alternatives like IC Markets.
- Despite enhancements to its range of markets, crypto offerings are relatively limited compared to other brokers such as eToro, with no option to invest in real coins.
#2 - XM
Why We Chose XM
XM is a globally recognized forex and CFD broker with 10+ million clients in 190+ countries. Since 2009, this trusted broker has been known for its low fees on 1000+ instruments. XM is regulated by multiple financial bodies, including the ASIC and CySEC.
"XM is one of the best forex and CFD brokers we have tested. The flexible account types will suit a variety of short-term trading styles while the $5 minimum deposit and smooth sign-up process make it easy to start trading."
- DayTrading Review Team
- Instruments: Forex, Stock CFDs, Turbo Stocks, Indices, Commodities, Precious Metals, Energies, Shares, Crypto, Futures
- Regulator: ASIC, CySEC, DFSA, FSC, FSCA
- Platforms: MT4, MT5
- Minimum Deposit: $5
- Minimum Trade: 0.01 Lots
Stock Exchanges
XM offers trading on 14 stock exchanges:
- Australian Securities Exchange (ASX)
- Borsa Italiana
- CAC 40 Index France
- DAX GER 40 Index
- Deutsche Boerse
- Dow Jones
- Euronext
- FTSE UK Index
- Hang Seng
- IBEX 35
- Japan Exchange Group
- Nasdaq
- S&P 500
- SIX Swiss Exchange
Pros
- Transparent and low fees with spreads from 0.0 pips that will help protect day trading profit margins
- Powerful MT4 and MT5 platforms are available with 60+ and 80+ technical charting tools
- XM continues to deliver diverse and multilingual educational materials and offers a useful live education schedule for its webinars and insights
Cons
- PayPal deposits are not supported
- There is weak regulatory oversight through the global entity
- There's $5 inactivity fee after only 3 months, though this won't affect active traders
#3 - IC Markets
Why We Chose IC Markets
IC Markets is a globally recognized forex and CFD broker known for its excellent pricing, comprehensive range of trading instruments, and premium trading technology. Founded in 2007 and headquartered in Australia, the brokerage is regulated by the ASIC, CySEC and FSA, and has attracted more than 180,000 clients from over 200 countries.
"IC Markets offers superior pricing, exceptionally fast execution and seamless deposits. The introduction of advanced charting platforms, notably TradingView, and the Raw Trader Plus account, ensures it remains a top choice for intermediate to advanced day traders."
- DayTrading Review Team
- Instruments: CFDs, Forex, Stocks, Indices, Commodities, Bonds, Futures, Crypto
- Regulator: ASIC, CySEC, FSA
- Platforms: MT4, MT5, cTrader, TradingView, TradingCentral, DupliTrade
- Minimum Deposit: $200
- Minimum Trade: 0.01 Lots
- Leverage: 1:30 (ASIC & CySEC), 1:500 (FSA), 1:1000 (Global)
Stock Exchanges
IC Markets offers trading on 12 stock exchanges:
- Australian Securities Exchange (ASX)
- CAC 40 Index France
- DAX GER 40 Index
- Dow Jones
- Euronext
- FTSE UK Index
- Hang Seng
- IBEX 35
- Nasdaq
- New York Stock Exchange
- Russell 2000
- S&P 500
Pros
- IC Markets offers among the tightest spreads in the industry, with 0.0-pip spreads on major currency pairs, making it especially cost-effective for day traders.
- As a tightly regulated and widely respected broker, IC Markets prioritizes client security and transparency, helping to ensure a reliable trading experience globally.
- You have access to over 2,250 CFDs across various markets, including forex, commodities, indices, stocks, bonds, and cryptocurrencies, allowing for diversified trading strategies.
Cons
- Despite four industry-leading third-party platforms, there is no proprietary software or trading app built with new traders in mind.
- Interest isn't paid on unused cash, an increasingly popular feature found at alternatives like Interactive Brokers.
- While IC Markets offers a selection of metals and cryptos for trading via CFDs, the range is not as extensive as brokers like eToro, limiting opportunities for traders interested in these asset classes.
#4 - Eightcap
Why We Chose Eightcap
"Eightcap delivers in every area for day traders with a growing selection of charting platforms and AI-powered tools. Now sporting 250+ crypto CFDs and the Crypto Crusher market scanner, it's also become a stand-out choice for crypto trading, winning our 'Best Crypto Broker' award two years in a row."
- DayTrading Review Team
- Instruments: CFDs, Forex, Stocks, Indices, Commodities
- Regulator: ASIC, FCA, xCySEC, SCB
- Platforms: MT4, MT5, TradingView
- Minimum Deposit: $100
- Minimum Trade: 0.01 Lots
Stock Exchanges
Eightcap offers trading on 16 stock exchanges:
- Australian Securities Exchange (ASX)
- CAC 40 Index France
- DAX GER 40 Index
- Dow Jones
- Euronext
- FTSE UK Index
- Hang Seng
- Hong Kong Stock Exchange
- Japan Exchange Group
- London Stock Exchange
- Nasdaq
- New York Stock Exchange
- Russell 2000
- S&P 500
- SIX Swiss Exchange
- Toronto Stock Exchange
Pros
- After bolstering its roster in 2021, Eightcap offers one of the most extensive selections of cryptocurrency CFDs in the market, with crypto/fiat pairs, crypto/crypto pairs, plus crypto indices for broader exposure to the market.
- With tight spreads from 0 pips, low commission fees, and high leverage up to 1:500 for certain clients, Eightcap provides cost-effective and flexible trading conditions that can accommodate an array of strategies, including day trading and scalping.
- Having excelled across all key areas for day traders, Eightcap outperformed more than 490 competitors to win our 'Best Overall Broker' award for 2024, also securing our 'Best Crypto Broker' title.
Cons
- Eightcap needs to continue bolstering its suite of instruments to match category leaders like Blackbull Markets with its 26,000+ assets, featuring a particularly weak selection of commodities.
- The demo account expires after 30 days and can only be extended upon request - a notable inconvenience compared to the likes of XM with its unlimited demo mode.
- Despite a useful library of educational guides and e-books, Eightcap still trails IG’s comprehensive toolkit for aspiring traders with its dedicated IG Academy app and 18 course categories.
#5 - LiteForex Europe
Why We Chose LiteForex Europe
LiteForex Europe is a CFD broker established in 2008 and authorized by the CySEC. The brokerage offers forex, commodities and indices via the MT4 and MT5 platforms. Spreads are ultra tight on ECN accounts and leverage is available up to 1:30 in line with EU regulations. LiteForex also offers a rich education centre for new day traders and social trading capabilities.
"LiteForex is a good option for active day traders with variable spreads from 0.0 pips, daily analysis and high-quality training guides. The forex copy system also lets you duplicate the positions of experienced traders."
- DayTrading Review Team
- Instruments: CFDs, Forex, Indices, Commodities
- Regulator: CySEC
- Platforms: MT4, MT5
- Minimum Deposit: $50
- Minimum Trade: 0.01 Lots
- Leverage: 1:30
Stock Exchanges
LiteForex Europe offers trading on 11 stock exchanges:
- Australian Securities Exchange (ASX)
- CAC 40 Index France
- DAX GER 40 Index
- Dow Jones
- Euronext
- FTSE UK Index
- Hang Seng
- IBEX 35
- Japan Exchange Group
- Nasdaq
- S&P 500
Pros
- The broker offers a VPS server for experience day traders looking to run their auto strategies continuously
- LiteForex has been established for 15+ years and is regulated by a trusted regulator, CySEC
- LiteForex offers a client-oriented approach, with personal manager assigned to each trader and 24/5 multilingual customer support
Cons
- Cryptocurrency trading is not offered
- The range of day trading markets is limited compared to alternatives, with no share CFDs offered
- Fees are fairly high, with spreads starting from 2.0 pips in the Classic account and $10 forex commissions in the ECN account
How To Compare DAX Brokers
DAX 40 brokers will be your gateway to the German stock market. They will facilitate trades and perhaps even finance some of your DAX trading activity via margin opportunities. But with so many options out there, how do you know what to look for when comparing brokers with access to the DAX 40? Below are some of the most important factors to consider:
- Costs – As a day trader, making a high volume of trades each day, high commission fees will quickly cut into your end-of-day market returns. So, check whether DAX brokers offer competitive commissions and spreads. Also, are DAX 40 prices laid out in a transparent format, free from hidden costs? As well as fees to open and close positions, consider other charges, such as deposit withdrawal rates or costs to convert money into the Euro, for example. Commission-free deposit methods should be top of your list, with third-party charges often covered by the best DAX brokers.
- Platform – When comparing DAX brokers, look for an easy-to-use and reliable trading platform. Also check whether it will have the DAX graphs and tools you need for technical analysis, including any historical data. In addition, does the platform facilitate fast execution speeds? Among the most popular third-party platforms is MetaTrader 4 (MT4). Alternatively, some of the top DAX 40 brokers offer their own terminals via desktop downloads, web browsers, or mobile apps.
- Tools – Look out for DAX brokers that provide access to educational content and additional features such as copy trading. Integrated economic calendars and live news streams are also ideal for staying in the loop with German company publications and local economic health, which may influence your decisions when it comes to investing on the exchange.
- Customer service – You don’t want to be sat losing money for hours because of a glitch on your platform. The best DAX brokers offer 24/7 support, including Pepperstone. Language flexibility should also be a key consideration when comparing DAX brokers, especially if you are not of German nationality. In addition, look out for DAX 40 brokers with toll-free telephone numbers, email addresses and live chat functionality. Some brokers with access to the DAX also now offer alternative instant messaging solutions, such as Facebook Messenger or WhatsApp.
What Is The DAX 40?
Before you start day trading on the DAX with registered brokers, you must first understand its intricacies. You probably know the index for the infamous companies listed, including BMW, Eon, Siemens, and Deutsche Bank. However, it’s worth noting the DAX 40 is relatively young. Its predecessor, the DAX 30, was only created in 1988 with a base index value of 1,000. The DAX 40 itself only came about in September 2021.
But a quick look at a DAX live chart today and you get a feel for the sheer size of the companies now listed. The DAX 40 companies listed by market capitalization make up a staggering 75+% of the value on the Frankfurt Stock Exchange. For this reason, this market index is often compared to the FTSE index of the UK, and the Dow Jones Industrial Average of the US.
Frankfurt Stock Exchange
The DAX trading system works in conjunction with the Frankfurt Stock Exchange. It is considered to be one of the largest and most efficient trading facilities found anywhere on the globe. The Frankfurt Stock Exchange posts several indices, including the DAX, Vdax, plus the Eurostoxx 50.
The DAX opening hours in GMT are 07:00 to 21:00 on weekdays.
Xetra
The Frankfurt Stock Exchange commands a significant share of all turnover in Europe. However, the majority of profit can be attributed to its Xetra trading system. This system has enabled a high volume of foreign investors to enter the exchange.
The electronic trading venue was launched in 1997 and this is where the DAX 40 live prices are taken from. Approximately 95% of all stocks and shares are now traded through Xetra. Xetra has determined the index after every second since the 1st of January 2006.
The system was originally created for use on the Frankfurt Stock Exchange. However, it has since expanded to be used on numerous exchanges across the globe. This includes stock exchanges in Ireland, Shanghai, and Vienna. Today it facilitates the trade of stocks, bonds, funds, warrants, and commodities contracts.
How The DAX Is Measured
Deutsche Börse, the operator of Xetra, tells us the DAX 40 measures company performance in terms of order book volume and market capitalization. They calculate the index weightings, plus the average trading volume using a free-float methodology.
Versions
It’s important to note there are two versions of the DAX you need to understand. These are the:
- Performance Index – This measures the total return and is the most commonly quoted of the two.
- Price Index – The price index is similar to the frequently quoted indices found in other countries and financial systems.
What Is The DAX Used For?
Domestic Outlook
Whilst to some extent it is used to gauge the health of the German economy, it is not quite that straightforward. This is because its selection is far smaller than the Dow Jones, for example. Therefore, it is not as accurate a reflection of the economy overall. However, it does give some indication of investor sentiment toward German equities.
Global Outlook
It also remains a crucial index for international investors to keep an eye on and trade via registered brokers. This is evidenced by the fact that approximately 75% of sales generated by DAX 40 listed companies are earned abroad. Also, because many of the DAX constituents are huge multinational companies that have a significant impact on global markets, the index can also be used to gauge global trends.
For example, a substantial number of the companies on the DAX 40 also trade in the US. This means the index serves as a good indicator of trends in the US. Furthermore, because the European trading session finishes before the US sessions begin, they are used by some to determine in which direction US markets will go.
Trading
From real-time charts, the DAX 40 is also used by individuals to generate substantial earnings. Thousands head online each day in an attempt to profit from short-term price fluctuations. The best DAX 40 brokers make online trading easy to get started with, especially for beginners.
Live DAX Price Chart
What You Need To Know To Start Trading The DAX
Put DAX 40 daily forecasts, DAX brokers comparisons and online investing to the side for a minute. Below a key facts sheet has been collated, including points you should be aware of before you start investing on the exchange.
- The distinguishing characteristic of the DAX 40 is that it is calculated as a performance index.
- Unlike other indices, the DAX 40 includes dividends in its calculations, therefore the return reported is the total return.
- All the DAX 40 index companies are capped at a weight of 10%. This ensures the legal provisions of the index are met. Plus, it sees to it that mergers and acquisitions do not create index titans, that will disproportionately impact the value of the index.
- The companies found on the Frankfurt Stock Exchange come from over 80 countries. Therefore, the index can be seriously impacted by global market influences.
- News about wars, natural disasters, GDP stats, interest rates, employment rates, and other economic benchmarks are common influencers of the DAX.
- Of the DAX 40 listed companies, the top five (Bayer, BASF, Siemens, SAP, and Allianz), make up around 43% of the entire index. So, despite best efforts, the weighting of the constituents is still relatively unbalanced. This means it is important you check the performance of individual companies at DAX brokers as well as their corresponding sectors.
- DAX dividend yield is simply the dividend per share, divided by the price per share. It is used to calculate the earnings on investment (shares). Ascertaining who can offer the best dividend stocks is all part of the fun.
DAX 40 Changes
Unlike other indexes, the DAX is updated with the next day’s future prices, even after the main stock exchange has closed.
The DAX top 40 index list is changed quarterly after review dates. Index constituents can be removed if they are no longer in the top forty-five largest companies. Businesses can be added if they break the twenty-five threshold. New entrants and ranking changes are determined by the Board of the German Stock Exchange (Deutsche Börse).
Admission
To be included as one of the index components and available for day traders to invest via major DAX 40 brokers, a company must be listed on the prime standard, the Frankfurt Stock Exchange. In addition, at least 10% of company shares must be held by the public.
DAX Trading Performance
A DAX index forecast 20 years ago would have failed to predict many of the highs and lows the index has seen. The DAX was in a bull market for a staggering 1,587 days between 2003 and 2007. During this time the value rose to its peak of 8,105.69.
Despite opening with a base value of 1,000, it wasn’t until April 10th, 2015 the price index first closed above its closing high from 2000. It was March 16th of 2015 when the performance index first exceeded 12,000.
Unsurprisingly, it suffered a blow during the credit crunch as other markets crashed, and it fell to 2,580 in 2009. Since then, 2013 saw an impressive over 1,000 point gain, reaching an all-time high of 8,736 on the 19th of September.
Looking down the DAX 40 stocks list for daily volume, you can see many of the constituents have benefited from globalization, such as Volkswagen and Henkel. This has been a crucial catalyst for growth. Not to mention, the likes of Bayer and Adidas have successfully broken into US markets as well as emerging Asian markets.
Big Players
Below some of the most famous and far-reaching of the 40 members have been listed, including the big four of the DAX 40.
- Adidas AG (ETR: ADS) – A world-famous brand that offers athletic clothing, shoes, and products.
- Allianz SE (ETR: ALV) – They are a huge financial services company, specializing in insurance and asset management.
- BASF SE (ETR: BAS) – BASF remains one of the largest chemical companies on the planet.
- Bayer AG (ETR: BAYN) – Bayer has developed some of the most popular pain relief drugs. It stands as a heavyweight in the healthcare industry.
- BMW AG (ETR: BMW) – BMW is another automobile manufacturer, selling award-winning cars all over the world.
- Deutsche Bank AG (ETR: DBK) – One of the world’s largest banks, Deutsche offers products and services to both individuals and businesses.
- Man SE (ETR: MAN) – Man design and manufacture commercial vehicles and equipment for use in 150 countries.
- Siemens AG (ETR: SIE) – Siemens produce electronics and electrical engineering services for a number of sectors.
- SAP AG (ETR: SAP) – The company makes enterprise software to manage business operations and has offices in 180 countries.
- Volkswagen AG (ETR: VOW) – This automobile manufacturer now has vehicles driven on every continent.
As you can see from above, sector weights in the automotive industry tip the scale significantly. The top DAX brokers will also provide detailed insights into leading stocks, along with key financial metrics and the latest price projections.
DAX 100
Another one of the important indices that you may find on major international brokers is the DAX 100 (Deutscher Aktienindex 100). The composition is straightforward. It represents the top 100 traded German stocks. It combines the 40 DAX equities and the top 60 of the MDAX equities listed on the Frankfurt Stock Exchange.
It is worth pointing out that since March 24th, 2003, the MDAX has included 50 equities and the previous DAX has changed to the HDAX. The HDAX represents the price development of all shares found in the DAX 40.
So, the HDAX consists of a more diverse and broad blue-chip index than the DAX. It covers all sectors listed in the EU-regulated markets’ Prime Standard Segment.
The MDAX, DAX 40, and TecDax are all aggregated to form the HDAX. The simplest way to wrap your head around it all is by using the definitions below:
- DAX 40 – The biggest and most actively traded companies on the Frankfurt Stock Exchange.
- MDAX – Consists of 50 mid-cap from the more traditional sectors.
- TecDax – This tracks the 30 largest issues from the technology sectors with the highest liquidity.
DAX Futures
An increasing number of individuals are moving away from traditional stock investments via online brokers. Instead, they are looking to trade DAX bitcoin, forex, CFDs, plus futures and options. DAX futures are offered by the Eurex exchange. This is a specific exchange that specializes in European futures.
A quick look at a DAX live futures chart and you can see there is ample opportunity for profit. However, it is worth noting you can get various forms of DAX futures. Contract specifications vary from standard futures to mini-sized DAX futures with a multiplier of 5 EUR. Usually, DAX futures are priced in euro, which is then converted to US dollars.
However, be warned, as individuals continue to turn impressive profits from futures investing, the market will become increasingly competitive.
Why Trade The Dax?
If you’re unsure whether investing on the DAX is for you, below are a couple of good reasons.
- Volatility – Volatility promises attractive price movements. Quite simply, bigger moves and higher daily ranges offer the savvy day trader plenty of opportunity to yield substantial DAX 40 monthly profits. You will see more volatility on the DAX compared to the FTSE, and other markets. This means you have the option of more setups at the start of the trading day and throughout your session.
- Lifestyle – Day trading on the DAX is ideal for those short on time. With steep movement in the morning, you can trade early on and then go about your day, whether it’s collecting the kids or going to work. Plus, the fact you can trade it alongside the FTSE with many international DAX brokers, means you could potentially double your returns at the same time.
How To Start Day Trading The DAX
There are a number of ways for international investors to gain access to the DAX, such as exchange-traded funds (ETFs) on European exchanges via registered brokers. However, you can also purchase individual components found in the index.
Before a discussion about DAX strategy and signals, there are a couple of straightforward steps you will need to follow after you have compared DAX brokers.
1. Choose A Security
The DAX is a highly competitive marketplace. That means it is important you choose the right security. So, when you conduct your chart analysis, look for volume and volatility. A security with both will enable you to enter and exit positions swiftly, whilst promising the greatest profit potential.
Volume
Volume is concerned simply with the total number of shares traded within a specific time period. So, if 50 transactions are made today, the daily volume will be 50. Volume gives weight to market moves. If you are unsure about a price fluctuation, the reliability of the move can be supported by volume. Put simply, the larger the volume, the more significant the move.
Volatility
Another important factor to consider when you’re analyzing your DAX 40 stock chart is volatility. This is concerned with the amount of risk/unpredictability in the size of changes in a security’s value. High volatility is a strong indicator you can expect significant price movement within a short period.
The price of stocks with lower volatility are likely to remain more stable. For day traders looking to profit in the short-term, this means reduced profit potential.
Beta
Fortunately, there is a straightforward way to measure the volatility of a potential security. You need to use ‘beta’. This predicts the volatility of a stock’s return against the returns of a comparative benchmark.
For example, if Volkswagen has a beta value of 1.2, it has moved around 120% for every 100% in the corresponding benchmark. If BMW has a beta of just .8, it has moved just 80% for every 100% in the benchmark index.
Consider both factors when you load up your DAX 40 price charts and potential securities for the day. Your bottom line will thank you for it.
DAX Day Trading Strategies
Even with the best DAX brokers and a thorough understanding of the markets, you need an effective strategy to generate high earnings.
Before we explore a couple of examples, you need to get to grips with technical analysis. To do that, you must get familiar with charts and patterns. You will need these to read historical index data. You will also use them to execute your strategy, from plotting your support and resistance levels to validating trends.
Once comfortable, you will find reading quickcharts, year charts, symbols, and live tickers will come easily, allowing you to focus on the business of trading.
Two-Hour Range Breakout
This is a simple DAX strategy to get your head around. Whilst many people like trading the DAX first hour, combining the first two hours of data and statistics can give you a better measurement of market sentiment.
For this example, we will use DAX futures, which open at 09:00 Central European Time, or 07:00 GMT. At this time you will often find a high number of economic releases. A lot of this information is full of noise and can be misleading. Being patient for a couple of hours will afford you greater opportunities, once the range or trend is set.
The only indicator you will need is volume data. Then you simply draw horizontal lines on the highs and lows of the first two-hour trading session. Now watch the volume whilst the price remains within these levels.
Application
Buy or sell on a breakout of this range. Use increased volume to validate the move on the breakout of the candle.
Place stops at the high or low of the breakout candle. Profits can be taken for 10-15 points. You will find that some traders can still have open positions until the last hour of trading.
This two-hour range and volume breakout is ideal for profiting from short-term trends. The volume validation also allows you to trade with confidence. It is worth bearing in mind though that setups aren’t constant. So, there may be some days when there are zero trades to make.
High/Low – Buy/Sell Trend Strategy
On the whole, the DAX tends to follow strong trends. However, there are periods of consolidation where flat price action can whipsaw your position. Price action is more stable once the trend is established.
So, you can use a 30-minute DAX intraday trading strategy. Quite simply, you buy if the price closes above the previous day’s high. Alternatively, you sell if the price closes below the previous day’s low. Then place your stops at the high or low of the 30-minute breakout candle.
This is a relatively transparent system where you can identify a fixed take profit level. However, if you are entering trends on a short-term basis, you must be aware of strong pullbacks, which could jeopardize your open winning position.
You can further validate moves by looking for support from volume data. Volume on the breakout of yesterday’s high or low will support your move. You can also use moving averages to trade with the trend.
However, the downside of that is that you will need to be tuned in closely to your 30-minute charts. This method requires patience. Some days you will have to wait until later in the trading session for a breakout.
There are a vast number of techniques out there, including scalping strategies. Your task is to find a strategy that compliments your trading style.
DAX Tips
News
The DAX is a complex marketplace, where prices rise and fall in response to news events. Therefore, keeping up to date with the news is vital. Put simply, the latest news will help you make better price predictions.
You can find German DAX 40 live index news today, from a variety of sources. For example, you can get the index and news from Yahoo Finance. Bloomberg is another popular location to go to for DAX 40 forecasts and discussions. You can also find official DAX websites that will keep you up to date with opening and closing prices, plus economic events that may impact their indices. The best DAX brokers will also integrate this information within their platform interfaces.
Staying tuned into the news will allow you to maintain an edge over the market. You can react rapidly to terrorist incidents, political announcements, and any other events that will cause a shift in price.
Education
Peter Lynch pointed out, “All the math you need in the stock market you get in the fourth grade.” However, school is not over. Understanding the complexities of the DAX requires utilizing the range of resources around you.
To name just a few that you can use to supplement your DAX knowledge and enhance your trading performance:
- Books & ebooks – You can find books on every aspect of DAX trading, no matter how niche.
- PDFs – These can help you read DAX values, live quotes, and updates. You can learn how to tell which holdings are doing well and worth day trading.
- Charts & graphs – These will help you make predictions for today, tomorrow, and the future. Plus, learning to read charts in real time will aide with your technical and fundamental analysis.
- Forums & chatrooms – You can question experienced traders on everything from levels to watch to trading after hours. They can help you get to grips with pivots and quotations. Seeking a range of opinions can also help you achieve trading diversity.
- Online courses & video tutorials – Learn how to set up charts, screen stocks, and execute trades, from some of the most successful traders out there.
All of the above will help bolster your end of day profits. Traders that believe they already know it all, often find they get swallowed up by the markets and spat out broke. So, check your DAX 40 calendar and use the market opening hours and holidays to get market smart. Many leading DAX brokers offer integrated educational content, suitable for new and experienced investors.
DAX Automated Trading
Once you’ve ironed out any creases in your DAX strategy, why not consider brokers offering automated trading systems to increase your profits? These algorithms act like robots. Once you’ve programmed in your criteria, they will enter and execute trades on your behalf. This enables you to make far more trades than you ever would manually, increasing your overall potential profit.
Journals
It may seem time-consuming, but a DAX investment journal is an excellent way to monitor and improve your performance. You can even use a straightforward excel spreadsheet or make notes within your broker’s terminal, you just need to include the following information:
- Entry & exit position
- Purchase & sale date & time
- Price
- Reason for making the trade
With this data in front of you, you will find it far easier to identify flaws in your strategy. Those without an investing journal often go on far longer making expensive mistakes, before ascertaining where they went wrong.
Final Word On DAX Brokers
Germany’s DAX is one of the most influential stock market indexes in the world, and arguably the most important in Europe. It is used as a thermometer to measure both the German and global economies. It is also used by investors to gauge market sentiment. To succeed at day trading the DAX you will need an effective strategy, plus you need to utilize the range of resources and tips outlined above. Head to our list of the best brokers with access to the DAX 40 to start trading.
FAQs
How Can I Make The Most Profit When Trading The DAX?
There is unfortunately, no straightforward answer to secure profits when investing on the DAX. Look out for DAX brokers with a competitive fee structure as commissions can quickly erode profit margins. Also make use of educational content, demo profiles, investment journals and tools to strengthen your overall strategy.
When Is The Best Time To Trade The DAX With Major Brokers?
Regular trading of the DAX begins early at 7 AM. You may find the earlier the better when it comes to investing on the exchange at the top DAX brokers. This is when the biggest changes occur in the shortest amount of time. Many professional day traders will prioritize this period to make the most of the high volatility in prices.
How Can I Choose The Best DAX Brokers?
There are many factors to consider when choosing between DAX brokers. We recommend comparing fees, platforms, tradeable instruments, customer service and tools.
How Many Companies Are Listed On The DAX 100 Index?
100 companies make up to DAX 100 index. It represents the top 100 traded German stocks. It combines the 40 DAX equities and the top 60 of the MDAX equities listed on the Frankfurt Stock Exchange.
What Are The Biggest Players On The DAX?
Some of the biggest companies included on the DAX include Adidas, Volkswagen, Deutsche Bank, BMW and Allianz. Look out for DAX brokers that offer key financial metrics on these firms, including the latest publications and upcoming announcements.