09-01-2018 Dax Technical Analysis

We are currently at a very interesting decision point for the Dax and deciding how to play this next move has been a popular topic of conversation in the Premium channels.

We have an expanding pivot setup, whereby each pivot is progressing widening from the previous pivots. These expanding pivot setups do not always follow rules, but the more symmetry they have, the more likely they are to exhibit predictable behaviour. In our case, we have a lot of symmetry.

09-01-2018 Dax Short Idea

Playing a short is the most obvious option because it will allow the best reward to risk ratio. A stop loss can be planted above the current highs so it’s just a case of deciding the profit target. We have been discussing a few target areas and have mapped out some options, so if you want to know more about how to trade these setups, come and join us in the premium section. The difficulty with the short option, is that we are likely to get wiped out by a spike, so keep that in mind. A short would be a counter-trend trade and potential be anticipating a top, so ensure that your reward to risk ratio is at least 4:1, because the probability of a loss is higher than normal.

09-01-2018 Dax Long Idea

Most long positions would probably be some type of ‘momo’ play (momentum). We are trending, we are bullish and we are making higher highs and higher lows. So follow the direction of the trend until the trend is no longer there. It enables us to take less risk because the probability is on our side. Get at least 3:1 on a trend following trade. (Always use a stop loss, no excuses. If you are a retail trader and you are not using stop losses, then you don’t have an edge, you have a death wish.) The major of major indices are at all time highs, but the Dax is not. There is political uncertainty at the moment, which perhaps contributes to the reason for the Dax lagging behind. However, we are talking about the index of the strongest economy in Europe. So it will likely catch up soon enough, right? The problem with a long right now is that we have the all time high right above us.

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09-01-2018 Dax Levels

KEY LEVELS
POC *13369
Value Area High *13379
Value Area Low *13355
14 Day ATR144.12
200 EMA12574
Daily R213453
Daily R113411
Daily Pivot13372
Daily S113330
Daily S213292
*These are FXCM numbers, not futures numbers. Please be aware that FXCM can often be 5-10 points higher than futures prices

09-01-2018 Dax Charts

Daily Chart

240m Chart

The price action seems fixed on aiming for the upper median line parallel on this fork. That supports the bullish view.

DaxTrader Algo

Here you can see the algo working on three indices: Dax, FTSE, Dow.

On Friday, in the Premium webinars, we are going to begin building an algo, similar to this one, to work on any market and any timeframe. Find out more about the benefits of DaxTrader Premium

 

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