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Part 1 Little Book of DAX
Part 1 Little Book of DAX
Part 1 Little Book of DAX
DAX
FOLLOW YOUR TRADING INSTINCT
BY
Colibri Trader
The
Beginning
The Base date for the DAX is 30
December 1987 and it was started
from a base value of 1,000. The
Xetra system calculates the index
after every 1 second since 1
January 2006..
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DAX COMPANIES
DAX INFO
30 GERMAN COMPANIES
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EXCHANGE
WHAT IS AN EXCHANGE
• An exchange is a marketplace where buyers and sellers come together to
trade. But it is not the usual type of marketplace. Take a look around on any
cash or derivatives market: you will not find a trace of the goods that are
being so busily traded.
• Instead, traders buy and sell certificated or standardised financial
instruments such as shares, fixed-income securities, options and futures.
2015
DAX closes above
12,000
1997
XETRA established the beginning of
a new era of exchanges
1585
Organized Securities Market
DEUTSCHE BÖRSE
DAX VERSIONS
COMPARISON OF THE TWO VERSIONS
PERFORMANCE
INDEX VS PRICE INDEX
Commonly Quoted
Perfomance
Dividends Counted
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MILESTONES
The beginning…the birth of DAX
1992
1988
1958
1820
1585 Renaming of
Introduction of Frankfurter
Listing of first DAX Wertpapierbörse
foreign share AG to Deutsche
First share in
Börse
Frankfurt-
Birth of the Frankfurt
Austrian
Stock Exchange
Central Bank
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MILESTONES
This century
2014
2011
2009
2007
2001 Starting the “7
Migration of the Market
Increase of the floor trading to Technology
interest in the Xetra Family” including
Acquisition of
STOXX Ltd. to technology trading
ISE
IPO of Deutsche 50% plus one architecture T7
Börse AG share
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DAX
Trading Secrets
TIPS
The tips presented in this e-book are not to
be taken for granted. They represent
assumptions based on past data and
therefore cannot guarantee future results.
Statistics is not the most consistent of all
sciences…
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TRADING DAYS
Consistent success doesn’t mean overtrading
Mondays
Mondays- especially
Monday mornings are not
Bank Holiday the best days to trade
After a bank holiday, the Fridays
DAX. This is because it is Friday afternoon is a bad
afternoon period is much
absorbing the news from day to trade DAX since
more reliable than the
the weekend and volumes are low as many
morning period
“establishing” direction traders have left their
desks already
Times to trade
Certain times are better to trade
DAX than others- the first two hours
of the European session; then the Rollover
first two hours of the US session Contract rollover days for
bring the most market participants options and futures, which
happen every three
months are bad days to
trade DAX
TRADING TIMES
Trading is a game of patience
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CFDs
Pros
VS FUTURES
CFDs FUTURES
Pros Pros
!Easy to trade
!Cheaper to trade
!Smaller initial deposit
VS !Transparency
!Some index CFDs are quoted 24h
!Better protection against overnight moves
!Accurate Technical
!24/7 Support Analysis
!Use of Order Flow
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Weaknesses of Futures for
Daytrading and Scalping
• The bid and the ask no longer touch each other as before, and if
you want to “enter” 20 lots for example, you will have 4 lots at
11,101.5, 9 lots at 11,102 and 7 lots at 11,102.5 on the Dax
futures which is the most liquid in Europe! With 20 lots on the Cac
40 FCE, you currently “knock off” the order book, which was
BID/ASK unthinkable 10 years ago.
• People who say that FCE futures are liquid, as I sometimes read,
have not seen an FCE futures order book for the past 10 years …
This example is similar to the Dow Jones 30 (YM) futures which
LIQUIDITY constantly has 2 to 3 points gaps which is still very low.
• This has immediate consequences on our trading results: a
portion of the sale or purchase orders are not (no longer)
executed or partially executed on futures even if the price is
affected. On American futures, with the algorithmic game and
ORDER BOOKS priority orders with CME licenses, professionals pass before us in
the futures order book, the “game” is distorted, we are served
only at the end of the order books … even when we anticipate
well in advance … Do not mince words on American futures, the
odds are stacked against us…
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More weaknesses of Futures for
Daytrading and Scalping
•Since the futures lot sizes cannot be “adjusted”, we can only enter
or exit lots in sizes of 1, it is rigid; we cannot for example enter a
profit or a loss partially on a lot by clearing 0.25 of the position and
leaving 0.75 there as it is.
Lot Sizes
•The costs are now often higher than on CFDs : by entering the
order book or preparing limit orders, commissions + gaps to fill
which are often higher than the CDFs spreads + the tick size
which is higher on futures …
•For example, by entering the order books on the Dow Jones
Costs futures, I will pay between 2 to 3 points gaps + lead/return
commissions + the tick size of 1 point. On CFDs, all inclusive, I
have a fixed spread of 1.8 on the Dow Jones with a tick size of 0.1
… almost twice cheaper. On the Dax, I pay a 1 point spread on
fixed lead/return commissions on CFDs with a tick size of 0.1
while on futures I have a 1 point spread on average + lead/return
Order Books commissions + a tick size of 0.5 …
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CFDs STRENGTHS
For scalping and daytrading
Absolute Liquidity
Compared to futures, CFDs offer ABSOLUTE liquidity; the price just needs to be
affected for you to be executed, irrespective of the number of lots. It is
absolutely revolutionary for scalpers or day traders. We no longer have partially
executed orders, no more problems of orders piling in an order book. affected
for you to be executed, irrespective of the number of lots. It is absolutely
revolutionary for scalpers or day traders. We no longer have partially executed
orders, no more problems of orders piling in an order book. affected for you to
be executed, irrespective of the number of lots. It is absolutely revolutionary
for scalpers or day traders. We no longer have partially executed orders, no
more problems of orders piling in an order book.
Liquidity Guarantee
CFDs have phased out order-books, the CFDs broker
guarantees liquidity and this is his problem and no
longer ours. In the past, 5 to 20% of my futures
scalping trades were not being traded or were
partially executed whereas the prices were affected, ABOUT CHART
but now 100% of my orders are perfectly executed… CFD Strengths
What makes CFDs better than Futures
Spreads
The consequence is that I no longer hesitate in taking a
trade depending on the time. I know that I can exit when I
want with a spread that will not soar before an
announcement…In fact, some CFDs brokers guarantee the
spread; and here we talk of guaranteed spread. This
means that even before or after an announcement, the
spread remains at 1 while on futures it moves from 1 to 5
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CFD Trading Example
Emphasising more strengths
Tick Size
The tick size, which is a disguised
spread, is 0.5 on Dax 30 and Cac 40 for
example on futures. On CFDs, it is 0.1 for
01 certain brokers. You can buy or sell in
Partial Fill the “futures spreads”. On futures, to
enter or exit, it will either be at 9000 or
If Dax 30 has a fixed spread of 1 on
9000.50. On CFDs you can enter or exit
CFDs which means that your 20 lots, at 9000 9000.1 9000.2 9000.3 9000.4
your XX lots will all be executed at
8378.5. No more worries about order-
02 9000.5… It always takes less fees. To
earn money or exit flat, the price should
books, position in order-books, partially not shift by 0.5 like on futures, 0.1 is
executed orders, slippage or orders enough.
03
Other
Lot Size There are other benefits, like larger
time slots compared to those on
The lot sizes can be adjusted on
CFDs; you can buy 1.17 lot,
04 futures, the possibility to be more
aggressive… but this would take a long
partially resell 0.45 lot if you
time to develop.
wish. We can adjust the size as
we wish, to about 0.01….
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Why do Scalpers and Futures
Day Traders not Trade CFDs
General Known Information
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“
How else are you going to become a
profitable trader, if you don’t learn by
”
a profitable trader.
COLIBRI TRADER
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Real Life Examples
The Best Way To Learn Trading Is To Trade Like The Professionals 79%
67%
47% 53%
28%
30%
15%
In the slides to come, I am going to show a few intraday charts (15 Minutes) of DAX. All
of the encircled areas represent bullish/bearish rejections- or good entry/exit points*.
*FOR MORE ON FINDING GOOD ENTRY/EXIT MARKET POINTS REFER TO COLIBRI TRADER’S TRADING COURSE
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WEB DEVELOPMENT
Contrary to popular belief, Lorem Ipsum is not simply random text. It
has roots in a piece of classical Latin literature from 45 BC.
Contrary to It has roots in a piece of classical Latin literature from
45 BC. Contrary to popular belief It has roots in a piece of literature
from 45 BC. Contrary to popular belief, Lorem Ipsum is not simply
random text.
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WEB DEVELOPMENT
Contrary to popular belief, Lorem Ipsum is not simply random text. It
has roots in a piece of classical Latin literature from 45 BC.
Contrary to It has roots in a piece of classical Latin literature from
45 BC. Contrary to popular belief It has roots in a piece of literature
from 45 BC. Contrary to popular belief, Lorem Ipsum is not simply
random text.
www.colibritrader.com/trading-course
WEB DEVELOPMENT
Contrary to popular belief, Lorem Ipsum is not simply random text. It
has roots in a piece of classical Latin literature from 45 BC.
Contrary to It has roots in a piece of classical Latin literature from
45 BC. Contrary to popular belief It has roots in a piece of literature
from 45 BC. Contrary to popular belief, Lorem Ipsum is not simply
random text.
www.colibritrader.com/trading-course
WEB DEVELOPMENT
Contrary to popular belief, Lorem Ipsum is not simply random text. It
has roots in a piece of classical Latin literature from 45 BC.
Contrary to It has roots in a piece of classical Latin literature from
45 BC. Contrary to popular belief It has roots in a piece of literature
from 45 BC. Contrary to popular belief, Lorem Ipsum is not simply
random text.
www.colibritrader.com/trading-course
WEB DEVELOPMENT
Contrary to popular belief, Lorem Ipsum is not simply random text. It
has roots in a piece of classical Latin literature from 45 BC.
Contrary to It has roots in a piece of classical Latin literature from
45 BC. Contrary to popular belief It has roots in a piece of literature
from 45 BC. Contrary to popular belief, Lorem Ipsum is not simply
random text.
www.colibritrader.com/trading-course
WEB DEVELOPMENT
Contrary to popular belief, Lorem Ipsum is not simply random text. It
has roots in a piece of classical Latin literature from 45 BC.
Contrary to It has roots in a piece of classical Latin literature from
45 BC. Contrary to popular belief It has roots in a piece of literature
from 45 BC. Contrary to popular belief, Lorem Ipsum is not simply
random text.
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Why do Scalpers and Daytraders Not
Massively Transition to CFDs
The Trader’s Edge
Changing Environment
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CFD Brokers
One Step Ahead
Daytraders
D S guaranteed spread of 1.
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What does a futures or CFDs trader want ?
Last Words
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INSTEAD OF CONCLUSION
The Little E-book of DAX
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“
How else are you going to become a
profitable trader, if you don’t learn by
”
a profitable trader.
COLIBRI TRADER
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ABOUT THE AUTHOR
COLIBRI TRADER
TRADING VISION
Trading is not a precise science- it is a form of art
MISSION
My mission is to help traders become consistent with my experience