The Diary Of Not Even Semi-Serious DAX30 DayTader

Hi, I'm Nick Powell, my introduction located here: http://www.trade2win.com/boards/new-trade2win/2180-introduce-yourself-1082.html#post2199604

I have decided to start this diary to document and record my sucsess and failures as well as progress as a full time DAX day trader. The purpose is so that I can publicly record my own trading habits (good or bad) and maybe learn from any mistakes I make or from any weaknesses that others may point out. The other purpose is to attempt to provide an interesting read for fellow DAX traders or traders in general.

Each day that I trade the DAX, I will make a post in the morning detailing the support and resistance levels that I have found and will be watching during the day and any possible scenarios that I will be looking for. In terms of making trading decisions, I use 3 strategies...

1. The opening range (not the traditional way of trading this)
2. A reversal/bounce strategy
3. Divergence at support/resistance levels

All 3 strategies are independent of each other and have their own separate rules for entry requirements and timing. Though all 3 strategies use the same money management and risk.

In terms of risk, I tend to always risk 3% of my account on each trade with a view of making 3% or more in return. If I don't see at least a 1:1 possibility on a trade, then I will not take the trade. I normally only take 1 or 2 trades per day, very very rarely will I place 3 trades and almost never more than 3 trades. In fact, I can't even remember the last time I had 3 trades in one day.

My trading style is day trading, I never hold positions over night and I never hold them beyond the DAX cash close. In fact most of my trades are entered and closed before the U.S opens up in the afternoon. The market that I trade is the DAX30 cash which is located on all of the financial spread betting platforms, the spread I have on my provider is 1 point.

At the end of each day I will post my diary of the days action and what trades I took along with my reasons and thoughts, I will also post a screen shot of my charts to accompany my postings.

Nick

Add me to your contact list. I trade the DAX too! Cheers.

Aston1st said:

Add me to your contact list. I trade the DAX too! Cheers.

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Hi thanks for the follow, though no need to add you as I forgot to enable the feature before I started, so it won't work now, anyone can post here.

Look toward to some DAX discussions.

Didn't manage to post my analysis this morning due to chronic back pain which I suffer from, think the way I was sleeping last night triggered it off again.

Anyway, will start posting my analysis from tomorrow onwards.

I have however took a trade LONG on the DAX after it hit and held one of my support zones 8505/15, I got in a little late 8526.8 with a 20 point stop after the initial sell off at the open this morning, had I been at the PC on time my actual entry would have been 8520.

I'm targeting a 50%-61.8% retracement of the current days range which comes in around 8548.5/58.5, will likely just take the full position off the table around this zone if seen today and call it a day.

Removed 70% of profit @ 8538 (£10 per point) for £112 profit and left the last 30% (£5 per point) running for target zone. Also move my stop loss to entry to secure the profit.

DAX30DayTrader said:

Removed 70% of profit @ 8538 (£10 per point) for £112 profit and left the last 30% (£5 per point) running for target zone. Also move my stop loss to entry to secure the profit.

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Nice one..can you explain a bit more about what you mean by trading the "opening range"?

Took the last 30% off @ 8543.4 for £83 profit, that takes the total profit today to £195. Not exactly a fortune, but on a day that I'm not completely focused it will do.

I still do think that we will push a little higher, but I'm off to lie down on a flat surface for an hour to let my back calm down.

paszkman said:

Nice one..can you explain a bit more about what you mean by trading the "opening range"?

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Sure, most traders tend to trade the 'breakout' of the opening range up or down, some traders say the opening range is the first 15 minutes, others say its the first 30 or 60 minutes. They tend to place a buy order a few points above the range and a sell order a few points below the range, however the futures trader that taught me how to trade the opening range does it differently becasue the DAX can be manipulated at the opening, especially when the bigger players know that most orders will sit above/below the actual opening range.

The way I trade the opening range is by letting the DAX open and then push away from the open, I do not call the opening range the first 15, 30 or 60 minutes as I have been told that there is no such thing as the 'opening range' from an actual LIFFE trader. That is a myth created by retail traders that dreamed it up and likely marketers to sell a system.

On average the DAX will return to it 'opening price' during the day around 8 out 10 times, once it does and if it does, you then observe the price action that takes place on the re-test of the opening price and any support/resistance that is near by. You can then get short or long based on that.

Once the DAX opens, its not uncommon for it to move 20-30 points away from the opening price, sometimes a little more before returning, normally this is to build the opening range on multiple time frames, so there will be a opening price range (OPR) on the 15m that might be 20pts,then a 30m OPR that might be 25pts and then an OPR on the 60m that is say 35pts, what will then happen it the DAX will break below or above these ranges triggering in lots of orders, but will then likely reverse and head back to the opening price taking out the stops that sit on the other side of those OPR's, its the revisit to the opening price that you then want to take notice of in order to trade the true OPR.

Some examples....

DAX made it into my initial target zone 8548/58 though I closed out early.

Watch for the opening price to be tested as I have detailed on the above post, could be another trade today.

Hi Nick, nice trades, I also trade the DAX, however, I do take that initial impulse trade from the open and target 3 trades a day, generally 2 between 8.00 - 10.30 and the first set up I get after the US opens.

A little different from your methodology, so it will be interesting to follow your journal, great start, keep up the good work

Rob

Dinos said:

Hi Nick, nice trades, I also trade the DAX, however, I do take that initial impulse trade from the open and target 3 trades a day, generally 2 between 8.00 - 10.30 and the first set up I get after the US opens.

A little different from your methodology, so it will be interesting to follow your journal, great start, keep up the good work

Rob

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Hi Rob and thanks for the feedback.

Yeah I know loads of DAX traders who also trade the opening range breakout etc and do well from it. My take on how to trade the opening price works for me and thats why I choose to trade it that way rather than the other ways. All it is really is a different approach.

I do however sometimes trade the DAX at the open depending if its trading at one of my support/resistance zones that I deem to be a strong zone and there is a decent gap, I also sometimes trade the gaps, though I use the 21:00 close and 8:00 open for the gap based on the futures close rather than the cash market close.

Nick

Dax

I mentioned in another post that Dax frightened me out of taking a trade due to the violent sell off. I use price action bars and supp/rest. but couldn,t get a handle on Dax this time. I usually trade dax alongside a forex pair.(I only trade between 7 and 11am)
Look forward to seeing your approach to Dax and how you set/use support and resistance.
Lie on your back with knees slightly bent usually alleviates a lot of the pain

See how the Dow came back to open and paused ?

Good trading to you

neil said:

I mentioned in another post that Dax frightened me out of taking a trade due to the violent sell off. I use price action bars and supp/rest. but couldn,t get a handle on Dax this time. I usually trade dax alongside a forex pair.
Look forward to seeing your approach to Dax and how you set/use support and resistance.
Lie on your back with knees slightly bent usually alleviates a lot of the pain

See how the Dow came back to open and paused ?

Good trading to you

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Hi Neil

Yeah DAX came back to the open as it does 80%+ of the time, thats the point I look to use my opening price strategy, today it actually gave signals on 2 of my strategies when it came back to the open, so it was a double signal for me to go short.

My next post covers this trade.

Nick

Trading The True Opening Range

DAX30DayTrader said:

Sure, most traders tend to trade the 'breakout' of the opening range up or down, some traders say the opening range is the first 15 minutes, others say its the first 30 or 60 minutes. They tend to place a buy order a few points above the range and a sell order a few points below the range, however the futures trader that taught me how to trade the opening range does it differently becasue the DAX can be manipulated at the opening, especially when the bigger players know that most orders will sit above/below the actual opening range.

The way I trade the opening range is by letting the DAX open and then push away from the open, I do not call the opening range the first 15, 30 or 60 minutes as I have been told that there is no such thing as the 'opening range' from an actual LIFFE trader. That is a myth created by retail traders that dreamed it up and likely marketers to sell a system.

On average the DAX will return to it 'opening price' during the day around 8 out 10 times, once it does and if it does, you then observe the price action that takes place on the re-test of the opening price and any support/resistance that is near by. You can then get short or long based on that.

Once the DAX opens, its not uncommon for it to move 20-30 points away from the opening price, sometimes a little more before returning, normally this is to build the opening range on multiple time frames, so there will be a opening price range (OPR) on the 15m that might be 20pts,then a 30m OPR that might be 25pts and then an OPR on the 60m that is say 35pts, what will then happen it the DAX will break below or above these ranges triggering in lots of orders, but will then likely reverse and head back to the opening price taking out the stops that sit on the other side of those OPR's, its the revisit to the opening price that you then want to take notice of in order to trade the true OPR.

Click to expand...

Perfect LIVE example of how to trade my version of the opening range....

80% + of the time the DAX returns to the days cash opening price after establishing multiple time frame opening ranges in the morning. If or once price returns to the opening, you make your trade long or short based on the price action that takes place around the open and near by support/resistance.

On today's action I decided to go short @ 8594 based on the PA from lower time frames and the 15 minute RSI being overbought after a large surge UP to the opening price and a resistance level at 8607. As we near closer to the European close I will likely be closing the trade soon and taking profit....

Will update...

DAX30DayTrader said:

Perfect LIVE example of how to trade my version of the opening range....

80% + of the time the DAX returns to the days cash opening price after establishing multiple time frame opening ranges in the morning. If or once price returns to the opening, you make your trade long or short based on the price action that takes place around the open and near by support/resistance.

On today's action I decided to go short @ 8594 based on the PA from lower time frames and the 15 minute RSI being overbought after a large surge UP to the opening price and a resistance level at 8607. As we near closer to the European close I will likely be closing the trade soon and taking profit....

Will update...

Click to expand...

BooHoo, I took half profit @ 8586 for £38 profit when price snapped back from the 8578 level, I also moved my stop to entry on the other half which has now stopped out for ZERO.

So let a £152 profit dwindle down to just a £38 profit, I should have closed the trade there and then as it was near the European close, but hey-Ho, thats the way the cookie crumbles sometimes.

Today's total profit from 2 trades £233, not the best of days profit wise,but its a profit and am done for the day.

Levels that I'm watching today -

Support - 8545/55, 8505/15, 8450/60, 8429

Resistance - 8605/10, 8645/55, 8685/700, 8735, 8765/67.

First trade of the day -

DAX opened and moved UP to test the trend line and 8605/10 resistance I provided on my morning levels today. I decided to take entry based on lower time frames showing signs of holding at this zone and my actual entry came @ 8604 with my stop loss @ 8620.

Still more possible downside to come in my opinion but I have decided to take profit on my trade and get the first profit of the day locked in the bank.

Closed out @ 8577 for a £550 profit.

Will be interesting if the DAX can push down to the 8545/55 support zone possibly the 8505/15 again, and then return to the cash open price today for a possible opening price strategy setup.

More action watching paint dry

DAX back at the opening, resistance also just above here around 8600/10, so will be watching price action around here for a possible trade set-up.