Volatility And Trading Opportunities In The German DAX Futures
One of the lesser known stock market indices is the German DAX Stock Futures and represents Germany’s 30 largest and most actively traded stocks.
DAX stands for Deutscher Aktienindex.
If you are not familiar with the DAX or considering trading the DAX for a living, you may be missing out on some great trading opportunities.
What Is The Dax Futures?
DAX is the stock index for the German Stock Market, the Deutsche Boerse (DTB).
The actual DAX index is calculated during the trading times, which are 8:30AM with a DAX closing time of 5:15PM Central European Time, and it is based on 30 stocks, including ones you may have heard of like Volkswagen, BMW, Lufthansa, Siemens and Adidas. The DAX futures market has good liquidity, and is estimated to have a daily volume of about 200,000 contracts.
The Dax trading hours are from 8:00AM to 10:00PM in Europe, which is 2:00AM to 4:00PM Eastern in the United States.
DAX futures are traded on the EUREX, which is an electronic exchange you can reach on www.eurexchange.com, under the symbol FDAX.
Our favorite time to day trade using exchange time is just after 9:00 am exchange time and about an hour before the US floor markets open which would be about 1:30 pm exchange time.
They do have a slightly higher margin requirement than the common stock futures for Dow, S&P, etc., and other futures – you need to have about 8,000 Euros deposited in your account to trade the DAX.
DAX Futures Contract
A DAX Futures Contract is valued at 25 Euros per point, which means that if FDAX is quoted at 5000.0, the value of the contract is 125,000 Euros.
Despite this, you may well find it worthwhile to look into DAX Futures, as they are known to be volatile and thus present good opportunities to the astute trader. The daily price range is about 80 points, so even on day trading you can pick up 30 to 50 points in one move.
Interestingly, and of advantage to the American trader, it’s generally found that the mornings are not so profitable, and that trading during the normal US market times works well.
The German market tends to follow the US markets, so this can help in determining the best plays.
As with all futures trading, DAX Futures are a leveraged derivative, which means that you can gain a much larger amount with your money than just the simple increase in the index.
Futures do have a greater risk, for those who have not done their homework, and for those who misread the signals, so you need to be informed and prepared before entering the trades – but the volatility tends to reward the diligent.
Mini DAX Index Futures
In response to the increased contract size by those who trade the DAX futures live, many traders were unable to participate in trading the DAX. Larger financial institutions found it to be too “cost heavy” to be used to hedge market exposure.
Eurex introduced the DAX E-Mini.
The Dax e-Mini is 1/5 the size of the regular contract and therefore requires less margin for day traders. While many traders were hesitant to trade the E-mini version due to volume issues, that concern no longer exists.
The mini DAX has lived up to the expectations and have become a favorite of day traders worldwide.
Day Trading DAX
At Netpicks, day trading DAX futures is done using our popular trading system, High Velocity Wave Trader.
We have put together a webinar that will give you all the details on a fully tested (and traded) Dax Futures day trading system (ideal for both European and US market hours).
This is what day trading the DAX looks like for our system traders:
The full details of this trading system will be fully released in the HVWT webinar you are invited to join.
Using our DAX specific trading plans and our “Power of Quitting” mantra, day trading does not have to be a full time job.
Click here to sign up for the webinar to learn how our trading system and DAX futures trading, can set you up as a successful trader.