02/01/2018 Dax Technical Analysis

Hello traders! A happy new year and welcome back to the 02/01/2018 Dax Technical Analysis.

I hope you all managed to take some time away from the screens to reflect on 2017 and begin to make plans for how to top that this year. I am delighted to be back; we have a lot of exciting things to look forward to in 2018.

Have a read of today’s analysis a little further down, but before we get to that, let me explain a few updates for 2018.


DaxTrader.co.uk Premium Webinar Updates

Our Premium Webinars are going to be more structured to deliver quality content and will include the following changes to the Webinars.

During the Monday Webinar we will discuss the Weekly Outlook for the coming week, including set-ups that we are watching, and our views on the Dax, FTSE, US indices and many other popular markets including forex, commodities, and cryptos. After the Webinar, you should be armed with plenty of strategies to target entries on your preferred markets.

The Wednesday Webinar will discuss a new topic every week from the Comprehensive Swing Trading Course that will be due for release towards the end of 2018 with the aim of providing you with the framework to turn your trading activities into a professional business. The first few topics include 1. all the basics (indicators, terminology, tools, and techniques) and then go on to 2. understanding why price moves, 3. learning proper risk management, 4. improving bankroll management, 5. investing in your record keeping. These five sections are just the beginning. The course includes approximately thirty-five more. It will be comprehensive. During these educational Webinars, we believe that your knowledge and skill as a trader will grow exponentially.

The Friday Webinar will discuss Programming and Coding and begin training you to build and design basic, intermediate and advanced scripts, indicators and expert advisors that will allow you to automate strategies and generate your own signals. There is no need to be concerned with this area if you are new, because, as traders, you are smart and you can pick it up. Programming is the skill of tomorrow, and you will need to learn these skills if you want to adapt. We will begin with simple tasks to help you get to grips with the world of coding and then we will learn to automate trading strategies which allow us to test (backtest) whether or not they are successful.

Subscribe now to take part or find out more here.


02/01/2018 Dax Technical Analysis

The daily chart above highlights three main points that I am finding attractive at the moment, and it is the foundation of my bullish personal ideas for the Dax this week. (Time will tell whether or not they’re correct).

  1. Grey ACR line set
  2. Green shaded support
  3. Pivot – Balance point – Extension line set

1. Grey ACR line set

This line set is a part of Alan Andrew’s work. It’s an Action, Centre, Reaction line set. We discuss Alan Andrew’s a lot as part of the Premium membership and this ACR line set is very effective.

First of all, you need to identify the pivots of an impulse leg (in this case, the impulse leg is the major swing higher). In this impulse leg, there are five pivots, P1-P5 and they form from the starting point P0.

Once you have identified the pivots, you can draw a line connecting line through P1 and P4 (this is the Centre line).

Then draw a parallel of that centre line and move it, so it connects it to P0 (this is the Reaction line).

Finally, take another parallel and place it on the other side of the Centre line, the same distance as the second line (this is the Action line).

I find this line set interesting because Alan Andrew’s says that for every action there is an opposite and equal reaction. Therefore if this line set is valid, we have a high probability of seeing a reaction here.

2. Green Shaded Support

The Green shaded support zone is much more straightforward to explain.

For the last few weeks, we have not been trending in any direction. The price action has traded in a range, and the basics of trading suggest that we should buy low and sell high. In the case of a trading range, a low would mean the bottom of the range. A high would mean the top of a trading range.

Well, we are currently at the bottom of the trading range. Another tool that you could use to highlight this range would be a Regression channel (RAFF).

3. Pivot – Balance Point – Extension line set

PBE is an acronym that I am going to create for this one. PBE = Pivot, Balance Point, Extension.

Price action moves in swings. When you take apart a swing, you can often find behaviours that are repeated in any markets. In this particular case, the behaviour we are looking at is a Balance point. The move I have marked out is a minor swing (bearish) which is split into two halves. The first half is when the swing begins, from the ‘Pivot’. Our pivot in this case is the high.

The balance point is 50% of an overall move and can take many forms, but in this case, it is consolidation (perhaps seen as a doji on a different time frame). If you can identify a Balance Point early enough, then you can anticipate an extension target.

The extension target has been hit.

 

 

02/01/2018 Dax Bias and Setups

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