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Is making money by trading FDAX that easy?

  #18 (permalink)

London UK
Trading Experience: Intermediate
Platform: InvestorRT/TT/DTN.IQ
Broker/Data: LCT/Iq Feed
Favorite Futures: SandP futures
Posts: 363 since Jul 2013
Thanks: 47 given, 169 received

The Dax is a GREAT market to make money on, but as people on here have mentioned it moves pretty damn fast sometimes. I trade both the mini and full contract (depending on how big my SL needs to be).

One of the advantages that is has against 'thicker' markets is that there is hardly any algo activity in comparison to something like the bund, which will stutter along collecting contracts on all sides for ages before making a move, and (in my case anyway) tricking you out of a position as it hasn't taken off in the way you expected. You want a volatile market, and the Dax is most certainly volatile.

One thing you need to be aware of, and as I don't know your entry criteria it's hard to judge, is that the mini dax has a bigger spread. FDAX is 0.5 to 1 pip, the mini is 1-2 pips. If you're taking short term trades with tight stops then this increase in spread will kill you, same as if you're taking profits for 10 point setc. That extra point will hurt. A lot.

Either way, if you are starting out on the Dax I would still start with the mini as it's a great training ground and you won't lose your shirt. Trading with 25 euros a point can be a bit concerning after all.

In regards to the Dax 'clearing out' levels, it does tend to do this with alarming regularity. However, when you understand why it's happening and get used to it (usually because trapped traders are triggering stops to exit their losing positions and price spikes as a result in a market where there are tends rather than hundreds of orders waiting on the other side) then it's nothing to get too scared about!

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