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 8 best brokers for trading on the DAX GER 40 Index:
#1 - Forex.com
Forex.com boasts a global reputation with multiple awards and 20+ years experience. Regulated in the US, EU, UK and Canada they provide a huge range of markets, not just forex, and offer competitive fees on a cutting-edge platform. The brand also provides a suite of additional tools, from performance analytics and SMART Signals to advanced charts and strategy builders.
"Forex.com is an excellent broker for forex traders with over 80 currency pairs, tight spreads, low commissions and powerful platforms. The brand is also heavily regulated while its parent company is listed on the NASDAQ, giving it a high trust score."
- DayTrading Review Team
- Instruments: Forex, Spot Metals
- Regulator: NFA, CFTC
- Platforms: MT4, MT5, TradingView, eSignal, AutoChartist, TradingCentral
- Min. Deposit: $100
- Min. Trade: 0.01 Lots
- Leverage: 1:50
Stock Exchanges
Forex.com offers trading on 13 stock exchanges:
- Australian Securities Exchange
- Borsa Italiana
- 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
- SIX Swiss Exchange
Forex Trading
Forex.com is a leading FX broker. The brand offers a wide range of currency pairs and some of the lowest fees in the industry. Spreads on the EUR/USD come in as low as 0.0 with a $7 commission per $100k.
Stocks Trading
Forex.com offers access to thousands of US, EU and UK stocks, with spreads of just 1 point. Speculate on household names as well as new IPOs. US stocks are available from just 1.8 cents per share.
Pros
- Beginner-friendly web platform and mobile app
- Top-rated forex and CFD broker
- VPS hosting for automated strategies
Cons
- No copy trading platform
- $15 monthly inactivity fee
- Investment offering varies between countries
#2 - Pocket Option
Founded in 2017, Pocket Option is a binary options broker offering up/down contracts on forex, stocks and cryptocurrencies. With over 100,000 active users and a global reach, the brand has proven popular with budding traders. Pocket Option also supports dozens of payment methods and has a low minimum trade of just $1.
"We recommend Pocket Option for aspiring binary options traders looking for copy trading services and a low minimum investment."
- DayTrading Review Team
- Instruments: Binary Options, Currencies, Commodities, Stocks, Indices
- Regulator: IFMRRC
- Platforms: MT5
- Min. Deposit: $50
- Min. Trade: $1
Stock Exchanges
Pocket Option offers trading on 11 stock exchanges:
- Australian Securities Exchange
- CAC 40 Index France
- DAX GER 40 Index
- Dow Jones
- Euronext
- FTSE UK Index
- IBEX 35
- Japan Exchange Group
- Nasdaq
- New York Stock Exchange
- S&P 500
Forex Trading
Binary and OTC options can be purchased on over 40 foreign exchange pairs. Typical payouts are also decent at 81% and users can trade forex binary options in just a couple of clicks.
Stocks Trading
Trade 30 of the most popular American multinational stocks including Microsoft and Google. Payouts on big brands come in at a decent 92% while indices are available up to 67%.
Crypto Trading
Pocket Option supports major cryptocurrencies on a beginner-friendly app. Over 10 leading cryptocurrencies are available with very high leverage up to 1:1000.
Pros
- Cashback and achievements
- Multiple strategies supported
- 50+ payment methods
Cons
- The expiration time is limited on trades
- IFMRRC is not a reputable regulator
- No MT4 trading platform
#3 - IQCent
IQCent is an offshore binary options and CFD broker based in the Marshall Islands with 10+ payment methods and a low $50 starting deposit. With 100+ assets, around the clock trading and high payouts the brand is popular with aspiring traders.
"IQCent will appeal to newer traders who want a platform where they can trade both binary options and CFDs with copy trading support and regular contests."
- DayTrading Review Team
- Instruments: Binary Options, CFDs, Forex, Stocks, Indices, Commodities, Crypto
- Regulator: IFMRRC
- Platforms: TradingView
- Min. Deposit: $250
- Min. Trade: $0.01
- Leverage: 1:500
Stock Exchanges
IQCent offers trading on 5 stock exchanges:
- DAX GER 40 Index
- Dow Jones
- FTSE UK Index
- Nasdaq
- S&P 500
CFD Trading
IQCent CFDs are available on forex, stocks, indices, commodities and cryptos with leverage variable by asset to a maximum of 1:500, which is higher than many alternatives. 24/7 customer support is also available to assist new users.
Forex Trading
IQCent traders can access CFDs or binary options on 40+ forex pairs, including majors, minors and exotics. CFD spreads start from 0.7 pips and binary options payouts are decent up to 95%. Trading takes place through the broker's proprietary platform with advanced analysis tools.
Stocks Trading
IQCent offers CFDs and binaries on four German stocks: Lufthansa, Deutsche, Daimler and BMW. Traders can also speculate on stock markets via seven leading indices including US30, S&P500 and FTSE100.
Crypto Trading
IQCent offers 17 crypto assets through its own platform, including Bitcoin, Ethereum and Litecoin. Leverage on crypto CFDs is limited to 1:10 while binary options payouts vary by token but are competitive.
Pros
- Copy trading service
- Binary options with 98% payouts
- Bonuses available up to 100% for Gold account members
Cons
- No MetaTrader 4 platform
- Not overseen by any highly respected regulator
- Poor selection of stocks with just four equities
#4 - Nadex
Nadex is a renowned exchange and binary options provider, based in the US. The company is fully regulated by the CFTC and offers options, call spreads and Knock Out contracts. Nadex also has just a $1 entry or exit fee and a user-friendly platform and proprietary app.
"Users looking to trade short-term binary options with a US-regulated broker will find a good platform in Nadex."
- DayTrading Review Team
- Instruments: Binary Options, Knock Outs™, Call Spreads
- Regulator: CFTC
- Platforms: Own
- Min. Deposit: $250
- Min. Trade: $1
Stock Exchanges
Nadex offers trading on 7 stock exchanges:
- DAX GER 40 Index
- Dow Jones
- FTSE UK Index
- Japan Exchange Group
- Nasdaq
- S&P 500
- Shenzhen Stock Exchange
Forex Trading
Speculate on 11 popular currency pairs via Knock Out contracts, call spreads and binary options. Nadex offers a wider range of timeframes than most binary options brokers, with contracts spanning from intraday to weekly.
Stocks Trading
Speculate on a handful of global indices via binary options contracts, including the S&P 500 and FTSE 100. There are low commissions and traders can see fixed payouts and risk levels before opening a trade.
Crypto Trading
Nadex offers a limited list of cryptos with just Bitcoin and Ethereum. Traders can go long or short though with straightforward binary options contracts that mean you don't need to own the underlying token.
Pros
- US regulated exchange with excellent trust score
- Extensive educational resources for those new to binary options trading
- Proprietary mobile app with good range of indicators and charting tools
Cons
- Products and tools are more advanced than some alternatives
- Narrow selection of cryptocurrencies to trade
- No welcome bonuses or financial incentives
#5 - ForexChief
ForexChief is a foreign exchange and CFD broker, established in 2014. The company is based offshore and registered with the VFSC and FMA. Users can choose between a wide selection of accounts and base currencies, making ForexChief accessible to global traders. The brand also stands out for its no deposit bonus and fee rebates for high-volume traders.
"ForexChief will prove popular with investors looking to trade highly leveraged CFDs on the popular MetaTrader platforms. The large welcome bonus and low starting deposit will also appeal to new traders."
- DayTrading Review Team
- Instruments: CFDs, Forex, Metals, Commodities, Stocks, Indices
- Regulator: VFSC
- Platforms: MT4, MT5
- Min. Deposit: $10
- Min. Trade: 0.01 Lots
- Leverage: 1:1000
Stock Exchanges
ForexChief offers trading on 14 stock exchanges:
- Australian Securities Exchange
- 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
- Nasdaq
- New York Stock Exchange
- S&P 500
CFD Trading
ForexChief offers a competitive range of CFDs, encompassing crypto, indices, energies and metals. A clear pricing schedule is available to clients with no hidden charges. Traders can also access very high leverage up to 1:1000.
Forex Trading
ForexChief supports spot foreign exchange trading on all account types for 40+ major, minor and exotic currency pairs on the leading MT4 and MT5 platforms. Spreads are tight starting from zero and there are no dealers or requotes.
Stocks Trading
ForexChief offers 100 US company stocks CFDs for MT4 DirectFX and Classic+ account holders. Investors can speculate on the price of some of the world's largest companies, including Apple and Coca Cola. Spreads start from 5.
Crypto Trading
ForexChief supports crypto trading with five major digital currencies paired against the US dollar. Traders can bet on rising and falling prices with leveraged CFDs and market-leading trading software.
Pros
- High leverage up to 1:1000 is available
- Turnover rebates for active traders
- A welcome deposit bonus is offered to new users
Cons
- Withdrawal fees on several payment methods
- Limited market research
- Weak regulatory oversight
#6 - Coinexx
Coinexx is an unregulated broker that provides leverage up to 1:500 on forex, commodities, indices and cryptocurrencies with deep liquidity, pure ECN spreads and negative balance protection. The broker uses crypto as base currencies and has low minimum deposit requirements of 0.001 BTC.
"Traders seeking highly leveraged CFDs with a broker that uses crypto as a base account currency will find a good match in Coinexx. The ECN model also offer tight spreads from 0 pips. On the downside, traders should note the weak regulatory oversight."
- DayTrading Review Team
- Instruments: Forex, Commodities, Indices, Cryptocurrencies
- Platforms: MT4, MT5
- Min. Deposit: 0.001 BTC
- Min. Trade: 0.01 Lots
- Leverage: 1:500
Stock Exchanges
Coinexx offers trading on 5 stock exchanges:
- DAX GER 40 Index
- Dow Jones
- FTSE UK Index
- Hong Kong Stock Exchange
- S&P 500
CFD Trading
Trade flexible CFDs on forex, commodities, indices and cryptos with tight spreads, fast execution, micro-lot trading and leverage up to 1:500. There are also no restrictions on day trading strategies.
Forex Trading
Trade 70 major, minor and exotic forex pairs with ultra-low ECN spreads and fast execution via the MT4 or MT5 platforms. There are also zero SL/TP limits and automated forex trading is well catered for.
Stocks Trading
Coinexx traders can speculate on broad movements of global markets via five indices covering exchanges in the US, UK, Germany, and China. On the downside, there are no individual stocks which is a significant drawback.
Crypto Trading
Trade CFDs on BTC, ETH, LTC and XRP with 1:5 leverage, market execution and 0.01 micro lot trading. However, we weren't impressed with the narrow choice of cryptos with no emerging, smaller-cap tokens available.
Pros
- Demo account available to prospective traders
- MetaTrader 4 and MetaTrader 5 integration
- 100% deposit bonus for new clients
Cons
- No copy trading service for aspiring investors
- No fiat account funding options - crypto only
- No regulatory oversight reduces safety
#7 - Scope Markets
Scope Markets offers day trading and investing in multiple spot and CFD instruments. The group of brokers is regulated in several locations, including Belize, Kenya and South Africa. Users get competitive trading conditions, a range of payment methods, strong support and can get started in a few straightforward steps.
"Scope Markets will appeal to traders seeking highly leveraged CFDs and spot investment products on the powerful MetaTrader 5 platform. The Scope Markets Group stands out for its range of trading tools and educational materials."
- DayTrading Review Team
- Instruments: Forex, Stocks, Commodities etc.
- Regulator: CMA, FSC, FSCA
- Platforms: MT4, MT5
- Min. Deposit: $50
- Min. Trade: 0.01 lots
- Leverage: 1:2000 (location dependent)
Stock Exchanges
Scope Markets offers trading on 10 stock exchanges:
- Australian Securities Exchange
- CAC 40 Index France
- DAX GER 40 Index
- Deutsche Boerse
- Euronext
- FTSE UK Index
- Hong Kong Stock Exchange
- Japan Exchange Group
- Nasdaq
- SIX Swiss Exchange
CFD Trading
Scope Markets clients can trade CFDs on a good selection of asset classes including forex, precious metals, energies, indices and global shares. The award-winning broker also offers a decent suite of educational materials and a YouTube channel to support aspiring traders.
Forex Trading
Scope Markets offers MT5 trading for a range of major, minor and exotic currency pairs with high leverage and a low starting deposit. Multilingual 24/5 support is also available to support forex traders.
Stocks Trading
Scope Markets offers stock trading on popular markets, alongside cash and futures indices. Clients can speculate on major stocks from US, EU, Australia, and more with competitive fees and reliable trading software.
Crypto Trading
Go long or short on popular cryptos like Bitcoin, Ethereum and Ripple with leveraged CFDs and competitive spreads. Depending on the jurisdiction, different regulations apply. CFDs on cryptocurrencies are not offered in all jurisdictions.
Pros
- Available in English, Spanish, Russian, Vietnamese & Chinese etc.
- Regular market news, updates and webinars
- Multi-regulated group
Cons
- Limited trading instruments
- Regulatory scrutiny varies between countries
#8 - RaceOption
RaceOption is a binary options broker operating from the Marshall Islands. With over 1,500 clients, the broker aims to offer fast funding, low fees and a secure trading environment. Traders can access over 100 binary options and CFDs, plus copy trading and weekly prizes.
"RaceOption will appeal to traders new to binary options looking for copy trading, contests and 24/7 customer support. Experienced traders will also appreciate the account-based perks and bonuses."
- DayTrading Review Team
- Instruments: Binary Options, CFDs
- Platforms: TradingView
- Min. Deposit: $250
- Min. Trade: $0.01
- Leverage: 1:500
Stock Exchanges
RaceOption offers trading on 2 stock exchanges:
- DAX GER 40 Index
- FTSE UK Index
CFD Trading
Access a modest range of CFD instruments across key markets, including indices and commodities. Clients can trade directly from charts with high leverage up to 1:500 and customisable time intervals.
Forex Trading
Trade 25+ major and minor currency pairs with access to over 30 technical indicators in the broker's proprietary terminal. You can also follow and replicate other forex trades using the integrated copy trader.
Stocks Trading
Go long or short on over 50 major global shares and map out your strategies using the intuitive charting tools. Those with $1,000+ starting capital can also enjoy their first 3 trades risk-free.
Crypto Trading
Trade popular crypto CFDs with leverage up to 1:30 and utilize convenient crypto funding in Bitcoin, Ethereum or other altcoins. You can also enjoy fully flexible, 24/7 crypto trading at home or on the go. Cryptos are paired with USD and CNY.
Pros
- Flexible weekend trading available plus 24/7 multilingual customer support
- Well-optimised proprietary mobile trading app with instant execution, full trading history and responsive live charts
- Beginner-friendly copy trading opportunities in the broker's proprietary trading platform
Cons
- $250 minimum deposit is higher than other binary options brokers
- Unregulated broker with lower safety score
- No free demo 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.
FAQ
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.