Easy & Profitable Suggestion for Trading the DAX (GER-30)

[vaughan]

Open a Clean GER-30 Chart (using [M5] 5-minute time frame) mark a vertical line on the previous GER-30 Open Candle Price at 21.00hrs (UK time) and then mark another vertical line on the Open Candle price at 7.00am for the current day. The price frequently reverts to the previous days open candle postion. The gap between these two levels obviously varies, but if the gap is fairly wide, say 40 points or more, we can trade this gap back to the previous days price and make a handsome profit with very little effort. Recommend to enter trade 1 pip above 2nd Bull or Bear Candle and to set stop-loss @ 1 point away (plus spread). Set take profit to previous Open Candle level, then just sit back and wait. Usually this trade will complete quite quickly (in around 30 mins). Hope this helps guys. Good Luck! )

 

[Enivid]

This looks like an interesting strategy to work in the current more or less sideways market. But would it work in a strong trending market?

 

[vaughan]

Hi! Hello. Thank you for your reply. Good question. The DAX market is priced by brokers overnight on spread betting platforms, meaning the market is synthetic. Brokers price the market based on the underlying FTSE100 market. Market conditions may delay the time taken to complete the reversion process as described in my original post but price does nevertheless revert. The only choice for us as traders is to decide whether the gap is wide enough to make a reasonable profit, For me, I only look at placing a trade where the margin for profit is at least 2R. On occassion, during bumpy conditions, our first attempt at entering the market may get stopped-out, but since our stop-loss is so tight, we can afford to place another entry; as always, patience is key, but this is rarely necessary. Hope this helps.

 

[Enivid]

Thank you for a detailed explanation. Now it looks more thought-out.

 

[vaughan]

My pleasure. Your feedback is very much appreciated. I'm a great believer in trading mechanical strategies, because we know in advance how much the trade will cost us, we know how much profit we stand to gain, and we know our chances of wining are far greater because we are using a strategy that is logically and statistically sound. Hope you have a great day. All the best.

 

[Enivid]

When do you usually set up the trade - as close to 7:00 London time as possible?

 

[vaughan]

Hello again. No probs. We need to draw a line level with the opening price of the candle at exactly 7.00am London time. Depending on which way the market is reverting, we wait for the first fractal candle (facing the right direction) to close and then enter the market at the next candle. We set our Stop at one point below the most recent low or above the most recent high depending which way we're trading, (which is usually only 1 point or 10 pips wide) and then our Take Profit is the line we've drawn from the Open Candle level at exactly 9pm on the previous night. ) I'm not sure if you've used a 'reversion strategy' before but this type of set-up is well known among professional traders, but sadly not shared very often, so I'm glad I can be here to breakdown such silly traditions and make this knowledge available to any and all who can benefit from this stuff. )

 

[Enivid]

I guess seeing a screenshot of an example of such a trade would really help here.

 

[vaughan]

Hi! Not so sure about that because a screenshot wouldn't be as educational as simply trying it for yourself. If you're not too sure what to expect all you to do is open a clean candle chart on the DAX and go back a few weeks marking out the past time zones, so you can see what happened in previous weeks and even months. You'l be able to see the reversion process as it has ocuured. Then of course there's always trying it for size on a demo account. )

 

[arcenciel]

Many thanks Vaughan for share

 

[Jenner]

Hi! Not so sure about that because a screenshot wouldn't be as educational as simply trying it for yourself. If you're not too sure what to expect all you to do is open a clean candle chart on the DAX and go back a few weeks marking out the past time zones, so you can see what happened in previous weeks and even months. You'l be able to see the reversion process as it has ocuured. Then of course there's always trying it for size on a demo account. )

A screenshot would give us a better idea though

 

[Crash101]

Vaughan,

Good to see you post it. This not only works on the DAX but all other stock or commodity markets to a degree. I am trading this style and looking at the direction even before the market opens. Recently, the DAX has been pretty horrible and I have been getting better results with the FRA40. They are joined at the hip anyways. I normally trade this style on Gold, JP225, DAX, FRA40 , US30 and SP500 in the afternoon - and look at currencies too such as EURGBP and others at the start of the London session. This strategy seems to work very nicely on market open in a generic way. Secret is to trade assets where they move into profit rapidly and you are able to get to break even reliably. Some very nice trades on the 1min time frame!!

Good Luck and nice to see someone else doing this.

Crash101.

Post automatically merged: Jul 25, 2021

A screenshot would give us a better idea though

Jenner,

Try it out on demo and consider trading on low timeframes. This is exactly what I am doing. Look at any day last week at 7am UK time and see market direction continued and look at R/R based on the right candle structure. Awesome you dont need much else other than this.

Crash101