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DAX UP GAP


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DAX UP GAP

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  #1 (permalink)
 OG65 
Taxhell Germany
 
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Trading: first BTC Trader NOW DAX40
 
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Hey,

From studying Charts I saw that Up-Gaps in DAX often close at the same DAY.
Do you guys see something similar ?
How could we use or implement this in the strategy or built a strategy around it?
(true= probabillity is high that if the dax gaps up, the gap closes on the same day)

would be happy to hear some thoughts from you guys.

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 Deetee 
Amsterdam
 
Experience: Intermediate
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Hi @OG65,

You're right.
You'll probably need more data to be able to trade something based on it. What would you trade? If you would go short at the opening, where would you put your stoploss?
It could be good to look at the prior day for instance. Or maybe how big the gap is.

In my journal I'm using statistical data to get a daily trade, and even though it has been profitable for about 8 months, it's small steps, and using a lot of data.

Have a look here:

It shows how often gaps close in the first 30 minutes of the opening per weekday.

Are you currently trading the DAX?

Cheers,
Deetee

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 Deetee 
Amsterdam
 
Experience: Intermediate
Platform: NinjaTrader / IB /Bookmap
Broker: EdgeClear / InteractiveBrokers / Rithmic
Trading: DAX / (M)NQ / (M)ES
 
Posts: 448 since Jul 2019
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OG65 View Post
Hey,

From studying Charts I saw that Up-Gaps in DAX often close at the same DAY.
Do you guys see something similar ?
How could we use or implement this in the strategy or built a strategy around it?
(true= probabillity is high that if the dax gaps up, the gap closes on the same day)

would be happy to hear some thoughts from you guys.

Are you able to work with Excel (making formulas with IF and VLOOKUP, pivot tables and stuff)?
If you want, I can provide you with 30 minute data for FDAX from 2010. That gives you something to play with, see if you find some significant outcomes, that might lead to trading

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  #4 (permalink)
 GFIs1 
Legendary Market Wizard
Switzerland
 
Experience: Intermediate
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Broker: IB / DTN
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Hi @OG65

In my pattern trading which is based upon the day of week and time I am treating gaps very carefully. As I have rules for every weekday I do exclude to look at gaps on Mondays, Fridays or when previous day range exceeds 250 points. A gap on my definition is when IB range (first 30m) after cash opening gets not back to the previous day high or low - to close it. So some levels haven't been traded and are waiting to be touched later.
Those patterns are very helpful to get the best times to start and to close the trade. Plus most important the direction for the trade: long or short. On rare days when a down gap is more away than 100% of previous day's range I am using another rule. So the accuracy is refined.
Interestingly the found rules are working fine for more than 12 years on the DAX. without refining them much.

The approach of @Deetee is of course totally different to mine. He is checking back data to find probability and probability of occurrence in volume and percentage given the database. I am just breaking down a pattern on every weekday and connect it with my special rules for gaps like described above: pattern alone or pattern combined with a gap gives me different entry and exit time. That easy. Just that I am not using any bunch of historical data at all. To complicate it a bit: I check if the start of IB - is it in Ichimoku Kumo 30m/60m/daily or not. All that I need to prepare before the trade starts. You can read all in my journal: the preparation of the day, the start of the trade and then before taking the trade: direction, start and end time. For the reader a live journal is much better than a hindsight one.

GFIs1

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  #5 (permalink)
 Deetee 
Amsterdam
 
Experience: Intermediate
Platform: NinjaTrader / IB /Bookmap
Broker: EdgeClear / InteractiveBrokers / Rithmic
Trading: DAX / (M)NQ / (M)ES
 
Posts: 448 since Jul 2019
Thanks: 1,800 given, 591 received


GFIs1 View Post
Hi @OG65

In my pattern trading which is based upon the day of week and time I am treating gaps very carefully. As I have rules for every weekday I do exclude to look at gaps on Mondays, Fridays or when previous day range exceeds 250 points. A gap on my definition is when IB range (first 30m) after cash opening gets not back to the previous day high or low - to close it. So some levels haven't been traded and are waiting to be touched later.
Those patterns are very helpful to get the best times to start and to close the trade. Plus most important the direction for the trade: long or short. On rare days when a down gap is more away than 100% of previous day's range I am using another rule. So the accuracy is refined.
Interestingly the found rules are working fine for more than 12 years on the DAX. without refining them much.

The approach of @Deetee is of course totally different to mine. He is checking back data to find probability and probability of occurrence in volume and percentage given the database. I am just breaking down a pattern on every weekday and connect it with my special rules for gaps like described above: pattern alone or pattern combined with a gap gives me different entry and exit time. That easy. Just that I am not using any bunch of historical data at all. To complicate it a bit: I check if the start of IB - is it in Ichimoku Kumo 30m/60m/daily or not. All that I need to prepare before the trade starts. You can read all in my journal: the preparation of the day, the start of the trade and then before taking the trade: direction, start and end time. For the reader a live journal is much better than a hindsight one.

GFIs1

Thanks. I read some pieces of information, that are not written anywhere in your journal, that might can help me

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 GFIs1 
Legendary Market Wizard
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Deetee View Post
Thanks. I read some pieces of information, that are not written anywhere in your journal, that might can help me

...thx!
Be happy to read them in a secret place like here
Of course I did not reveal the rules in a journal.
Hope those help you in your special approach!

GFIs1

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 OG65 
Taxhell Germany
 
Experience: Intermediate
Platform: .
Trading: first BTC Trader NOW DAX40
 
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Posts: 28 since Sep 2021
Thanks: 15 given, 17 received


Deetee View Post
Are you able to work with Excel (making formulas with IF and VLOOKUP, pivot tables and stuff)?
If you want, I can provide you with 30 minute data for FDAX from 2010. That gives you something to play with, see if you find some significant outcomes, that might lead to trading

interesting but unfortunatly not. But i will look in to it

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  #8 (permalink)
 OG65 
Taxhell Germany
 
Experience: Intermediate
Platform: .
Trading: first BTC Trader NOW DAX40
 
OG65's Avatar
 
Posts: 28 since Sep 2021
Thanks: 15 given, 17 received


GFIs1 View Post
Hi @OG65

In my pattern trading which is based upon the day of week and time I am treating gaps very carefully. As I have rules for every weekday I do exclude to look at gaps on Mondays, Fridays or when previous day range exceeds 250 points. A gap on my definition is when IB range (first 30m) after cash opening gets not back to the previous day high or low - to close it. So some levels haven't been traded and are waiting to be touched later.
Those patterns are very helpful to get the best times to start and to close the trade. Plus most important the direction for the trade: long or short. On rare days when a down gap is more away than 100% of previous day's range I am using another rule. So the accuracy is refined.
Interestingly the found rules are working fine for more than 12 years on the DAX. without refining them much.

The approach of @Deetee is of course totally different to mine. He is checking back data to find probability and probability of occurrence in volume and percentage given the database. I am just breaking down a pattern on every weekday and connect it with my special rules for gaps like described above: pattern alone or pattern combined with a gap gives me different entry and exit time. That easy. Just that I am not using any bunch of historical data at all. To complicate it a bit: I check if the start of IB - is it in Ichimoku Kumo 30m/60m/daily or not. All that I need to prepare before the trade starts. You can read all in my journal: the preparation of the day, the start of the trade and then before taking the trade: direction, start and end time. For the reader a live journal is much better than a hindsight one.

GFIs1

HEY,
really interesting how did you learn this kind of skill to create a own startegy?

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  #9 (permalink)
 OG65 
Taxhell Germany
 
Experience: Intermediate
Platform: .
Trading: first BTC Trader NOW DAX40
 
OG65's Avatar
 
Posts: 28 since Sep 2021
Thanks: 15 given, 17 received


GFIs1 View Post
Hi @OG65

In my pattern trading which is based upon the day of week and time I am treating gaps very carefully. As I have rules for every weekday I do exclude to look at gaps on Mondays, Fridays or when previous day range exceeds 250 points. A gap on my definition is when IB range (first 30m) after cash opening gets not back to the previous day high or low - to close it. So some levels haven't been traded and are waiting to be touched later.
Those patterns are very helpful to get the best times to start and to close the trade. Plus most important the direction for the trade: long or short. On rare days when a down gap is more away than 100% of previous day's range I am using another rule. So the accuracy is refined.
Interestingly the found rules are working fine for more than 12 years on the DAX. without refining them much.

The approach of @Deetee is of course totally different to mine. He is checking back data to find probability and probability of occurrence in volume and percentage given the database. I am just breaking down a pattern on every weekday and connect it with my special rules for gaps like described above: pattern alone or pattern combined with a gap gives me different entry and exit time. That easy. Just that I am not using any bunch of historical data at all. To complicate it a bit: I check if the start of IB - is it in Ichimoku Kumo 30m/60m/daily or not. All that I need to prepare before the trade starts. You can read all in my journal: the preparation of the day, the start of the trade and then before taking the trade: direction, start and end time. For the reader a live journal is much better than a hindsight one.

GFIs1

HEY,
really interesting how did you learn this kind of skill to create a own startegy?

Started this thread Reply With Quote
 
(login for full post details)
  #10 (permalink)
 GFIs1 
Legendary Market Wizard
Switzerland
 
Experience: Intermediate
Platform: Investor/RT
Broker: IB / DTN
Trading: Futures
 
Posts: 5,871 since Feb 2012
Thanks: 5,590 given, 12,473 received



OG65 View Post
HEY,
really interesting how did you learn this kind of skill to create a own startegy?


HOW TO

The strategy is simple - but works only for one instrument at a time: I am looking for patterns that occur regularly on a given WEEKDAY. For the DAX I am using the 30m time frame. Searching patterns that are repeating with a higher probability.
The quintessence: Money flows into markets on Mondays and are taken out on Fridays. For important news money is taken out too before such an event. Just to omit higher risk aka volatility.
That said you are on a more secure path for day trading as well as to minimize the stop loss settings to avoid large sums.
Important: KNOW YOUR INSTRUMENT - and do not hop around on many instruments. Indexes are quite stable in the development as well with lower risk than on single companies.

A copy from my recent post in my daily journal:
" quite a complicated setup today:
• gap down
• Friday rule set
• IFO rule (numbers will be horrible)
• triple witch
• price on IB finish in KUMO 30m, 60m and 1 day
• Asia as front runner quite red
Haven't seen such a surprise bag in my trading ever
My final decision? Just the normal Friday rule! "

That trade made + 106 points for one contract = € 2650 in some hours.

Happy weekend
GFIs1

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