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CFD Broker for DAX

  #8 (permalink)

Birmingham, UK
 
Trading Experience: Beginner
Platform: NinjaTrader
Favorite Futures: 6E,6B
 
Posts: 34 since Aug 2015
Thanks: 24 given, 11 received


JohnS View Post
here are some of my thoughts if you don't mind my 2cents,
1 min or 2 seconds is not good. you are trading noise...you will make your broker rich and your account will be vaporized sooner or later! I made the mistake of starting out with the big DAX and scalping a few seconds at time and made my broker rich and my account poor!: SIM is not real life and making hundreds of real cash scalping trades and taking heat and pain of little loses invoke all the wrong mental reactions and can lead to a trauma. :stickman: so don't do that! Learn the right way IMO which is trading real cash on a large time frame using smallest instrument possible like a ETF or 1 contract CFD.

when I trade the DAX, I try to get the swing of the day or the morning for 30-100 points and hold for 30 mins to a few hours and always look for an overnight hold if possible!...its very doable with a 20-30 pt stop and more relaxing then getting in and out and paying the Broker commish! The favorite short timeframe move (IMHO) is the morning swing from +/-2SD VWAP targeting VWAP and/ or +/-1 & 2 SD. I try to trade 2-3 contracts and fade this morning move and scale out, unless its a trend morning and you get in the trend.


as for contract size:
  • unless you have 100k Euro account and experience the full DAX (12.5 Euro/tick; one tick is 0.5 points) is way too big.
  • The other option is the Mini-DAX, which trades with a tick size of 1 point, 1 point is 5 euros.
  • The CFD trades in 1 point increments and is based on the DAX index (read the IB website on how it is calculated). 1 tick is 1 point is 1 euros. I would not "scalp" the CFD for a few points as the commish will eat you up.


more food for thought and just my idea of course everyone must come up with their own method and charting that works for themselves.
  • Learn the market structure and look at the 30 min chart of the morning and day over the past year using the Daily, Monthly, yearly VWAP if you have them on your charting software, the relative Volume so you can see market participation, TICK IBIS so you can see buying/selling strength, and MACD for changing price momentum (my preference). You will begin to get an idea of the swings and the effect of changing volume on the price. The DAX is like any other finely crafted German product and is reliable!
  • There are loads of good resources in FIO in the money management section and in SPOOS thread for trading the swing. Read Tigertrader's many good threads on the subject.

The bottom line advice is: Start small size with ETF or CFD and large time frames and trade the swing of the day/month. The DAX will reward you big time because it can easily put on a 1000 point swing over the course of a few days (I have yet to catch one, but you can!) and build up a small account IF you are patient and learn the market first before your burn up your capital.

Hi John,

Thank you for your advice and opinion, I always appricieted that from experienced traders.
As you say, making broker rich and my account small is the one thing that I am a bit afraid of. Concept of this strategy can be used on higher time frames, tried 5 min, 1hour and daily and it showed positive result, albeit more robust back testing sample will be needed. This strategy is based only on price action and fibbo.

I have actually started with this about 9 months ago with similar back testing results as now, but left it for about 7 months. Now, as this election madness was around, stopped trading for about 2 weeks and revisited this idea. Results are in the same ball park as before, so I'm getting tempted. But will test the higher time frames and see if it can be applied on intraday, instead of scalping.

Further more, I started to integrate orderflow and vwap into this as well , plus delta and tape reading, to get stronger confluences.

Other than this idea with dax, I am very conservative. As you mentioned using 30 minutes charts, market profile, orderflow for volumes, price action, vwap and tape reader. Patiently waiting for my levels.

Going with 1-2% SL and scaling size of a position relative to my SL. If SL is out of 2% I just scale down the size of the position.Build up position size relative to my money and risk management.
Thanks for you advise, a lot of work to be done.:-)

I am now deciding for this CFDs brokers between Fxcm, Swiss , Dukascopy and oanda. Have you tried any of them?

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