I am yet to go live after close to a year of sim trading. I have gotten to know the FDAX index fairly well in that time and I would like to go live trading 1 - 2 contracts shortly.
There is just a couple of things I would like help with if you wouldn't mind.
I have no experience with liquidity and how taking a position may affect the price. Is the FDAX contract liquid enough to enter positions easily and without affecting the price? How many contracts do you start to face liquidity problems with it?
Also, from what I can gather FDAX requires one of the largest margins out of all of the index futures - why is this?
And finally, are there any other highly volatile high liquidity futures contracts to trade around the time the DAX is trading? I trade the European session and the contracts I would like to trade tend to be fairly slow/low volume at that time, CL for example. It seems as if they are not worth trading at that time.
I have looked at FESX but it just does not seem to move enough for my scalping style, same deal with the Euro bund.
Any suggestions would be appreciated.
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If i were located in the Euro zone i would not bother trading the Futures market. I would trade the Forex market with its plethora of currencies. The best moves occur when i sleep. You could trade the beast (GBP/JPY) or the beauty (GBP/USD) and be done in a couple of hours.
I don't think you might have any problem trading the FDAX with just 1 or 2 contracts specially if you trade at peak times. Have not ever heard people complaining about slippage.
Compare the Forex market volatility to the Futures market volatility.
Presumably during the US morning session only, using the X-Trader spread module ?
May I please ask how you learned to spread intraday (if that's what you're doing) ?
Twiddle : I trade FDAX outright looking for setups on a 15 min chart, then using an R5 range bar chart for entry & trade management, 2 to 4 contracts. Usually plenty of liquidity during the European morning, but if you aspire to trade a 20 lot one day and trade for small targets on a fast chart, you will have to accept a tick or two slippage.
FDAX has a high margin (although only $2500 intraday with Mirus) because it's volatile and the general view is absolutely NOT to start trading with FDAX, FESX being considerd preferable. I don't necessarily agree : if you have traded sim for a while and are consistently profitable with 1 - 2 contracts and are sufficiently capitalised, go for it. If your live results are not comparable with sim, stop live trading immediately and revert to sim & address what most likely will be the psychological issues getting in the way (the most challenging part of trading imho).
I'm not aware of a comparable futures market during the European morning - perhaps 6E to a lesser extent - the only alternative is to trade cash forex as one poster has suggested....
... or maybe trade FGBL with several times the size on a very fast chart. That should keep you focussed... (actually, every time I read one of sharky's posts I seriously consider this option) .
Lastly, beware of following suggestions from people you don't know on trading forums .
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I LOVE the DAX! I play gap fills 01:00 a.m. to 02:00 am US central time, and then from 2:00 am going forward (as the EU cash session opens) I work only Momentum Trades using my Cumulative Delta based set ups. The DAX trading all year has been some of the best (even better than CL trading at times) with these great currency moves in the background. DAX Momentum Trade explained from the other day..... YouTube - Momentum Trading The DAX With Cumulative Delta
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