DAX Trading Analysis
DAX Trading Analysis
by: Colibri Trader
In my last article on DAX from a sequence of DAX articles I spotted a short setup. Price went down to my first target and I covered my position.
Price dipped in down to 12100 and then it closed the day at 12170. Seems like the market is in a range and it is hard to make up its mind.
Usually it might take a couple of months for a bigger change to happen. So far, price has dropped significantly from its top in a close to 1,000 points move.
What is frightening here is that the US indices are seriously diverging from their European counterparts. Historically this occurs around market tops/bottoms.
DAX is a historical precursor of US indices’ major trend changes. Could this time be different?
DAX Trading Analysis
On Friday, price went down to 12100 and then back to 12170 closing the day with a pin bar. Could this be the end of the minor correction? Or maybe this is a minor correction of a major trend change.
Time and price action will show.
What could be a better indicator of trend change than time? Although this could be the starting line of a long essay on trend analysis, I am currently questioning what could be the best course of action.
I am looking at the daily chart and seeing a lot of hesitance and confusing signals. There was a bullish rejection last week, which led to the latest downslide.
Friday’s pin bar is showing a bearish rejection on a minor support level. This made me took my small profits and “run away”.
The question a lot will be asking is “and now what?”. I am not sure I have an answer for that. I will be looking how the price opens.
If I see an encouraging bullish setup from an intraday point of view, I might take a small long trade. As a first potential price target I am seeing 12300.
On the other side, if I see another bullish rejection, I might consider re-entering in a short trade. A hypothetical short entry could be around 12150. A potential price target could be the level of 12000.
Whatever you do, make sure you do it carefully! Never risk more than 1-2% of your total capital.
Remember: Your Capital is Your Only Asset
Have you checked my article on Why Doing More of What Works Will Make You a Better Trader
It is probably a great idea also checking Contracting Triangles Don’t forget to download the free spreadsheet with additional examples
20 thoughts on “DAX Trading Analysis”
Sharing some thoughts here:
To repeat you and state the obvious, 12300 would be expected as a resisitance zone and poss turning point.
But what is not so obvious is the 12500 area, this would be a level that would confuse both longs and shorts.
It also is the 50% retrace area.
This could be an optimum zone that the MM’s and algo’s might pick (12500)
You never know, I’ve learnt to expect the unexpected.
Regards and thanks for your Sunday effort for this article.
So far I am not really seeing any bullish/bearish indication. More of a confusion here. I am looking for a rejection of the 12200 and then possibly a short setup. So far price is not printing anything, so a quiet Monday. On the other side, I have noticed a multi-month support level on USDCAD (as I have shared on my Twitter acc). There might be a possible long forming here, but still early to say.
Dax has reached one of our theoretical R levels. 12300 area
The climactic behaviour in US indices seems to have a bearing on my thoughts, of course price action trumps all thoughts but non the less instincts are heightened.
Back to price action only:
Pretty strong daily Dax candle so all that I can go on is that support has been established at the 12125 level.
This level important and breaking this would pave a way much lower imo.
12500 is next major R level, the scenario is still the sane from my last post.
I am now looking for candle action to give clues into next poss setup. From 12300 to 12500
NOTE: While it may sound like I’m watching every tic, I am not only sharing commentary as I have no concrete trade signals
I have been waiting for this potential setup for quite some time. It looks like now it is forming, but will wait and see how price action reacts to the close of the 4H.
Apart from that am not really looking at US indices apart from NASDAQ. It is a bit of a terra incognita for me, so not even sure if it is a good idea pursuing something there. I am risking going against my rule for finding that “boring trade” haha.
Have a profitable week!
12332 was a weekly R level I had on my charts but as luck would have it I was away during this session until later on and missed it.
I think if one looks at intermarket relationships the US does have some bearing on things but in this same breath sometimes it doesn’t. Bit like levels you never know if they will hold or not.
It is commendable to wait for that boring trade, the one that just about moves into profit after entering these are great !
I had one on the SPI200 this morning +1089.00 in 1/2 hour. Shorted I waited for this setup for 48hrs and it came off very nicely. Absolutely no stress at all the only thing was that I scaled out too soon 20 pts too soon.
While it was executed during RTH it was a trade I was stalking so not an intraday trade imo.
The time zone here is very good for trading as the asx opens at 8am – 2pm and the Dax opens at 3pm. I have traded covered both markets many times.
Dax, I still would like to look at shorting higher up too close to support levels to make any type of trend trade out of it … just my 2 cents
…That boring trade! If I am ever to write a trading book, I think that would be the name of it! What better than a boring trade. What more profitable than a boring trade. I have opened a small short trade yesterday. I posted the pinbar formation on my twitter account. Looking at 12280 to maybe add another one, but price action will show. For your missed opportunity: Another one will come around. There is always another Monday, as long as you have your only asset- capital. So, be more protective than aggressive! Follow the market, because it has a story to tell:) In my opinion, each timezone has its pros and cons. Just keep it down to basics and follow your rules mate!
Yes rules we must follow them no exceptions.
It is the one thing that separates the 2 classes of traders.
In fact I can say for a certainty that my rules could allow a trader with the proper mindset and capital to trade his way to financial freedom.
The only “small” variable is the trader himself, he is the emotive variable that can unravel even the most robust system in town.
12265 to 12280 offers a pretty good R:R MT4 charts
Lets see what happens 🙂
I agree with what you are saying. Just like one system used by two traders is always giving different trading results. The most important thing is sticking to the rules, everything else is secondary. Now, somebody reading our comments might think- those guys are completely crazy- they are repeating the same sentence over and over again:) I hope there will be less people thinking like that, I really hope so!
Looking forward for ‘the boring trade’ to be available on bookstore shelf colibri!
Wow ! Dax sub 12000, mid July that would have been a phantasmagoria
It would! But don’t forget that we are not trying to predict where the market will go. We are just here to be humble enough and get on the train before it leaves the station. We are just here to “smell” where the fire comes from, before we ran away from this forest. We are just here to read the type most of all!
Dax strong but more likely shorts covering. It could be the next short signal will be reliable.
Some setups more reliable than others,
I would not know but I do wonder if anyone is still holding shorts from the 12800 to 900 area.
What would this person look like in trading profile ?
The break of 12000 happened so easily was a surprise so I am looking at 11450 area as a target for the next leg down should it come off.
Dax moving up I picked 12100 as an interest point to see what p/a does here, watching this session as to sentiment.
I’m a bit upside down atm in a pos that is below current market.
In looking to the future I see lower prices unless the macro enviroment changes completely. However the US indicies are trying to push higher with neg divergence. Can you imagine if they keep soldering on without a real retrace ?
We spoke once about knowing the diff between whether a price move was short covering or genuine buyers. Well I’ve refined it and have figured out a way to know. “Comommon sense really”
12100 may be too close 12300 is a more realistic place for a turning point. (Only an observation atm)
The Dax has a 1000 point market boundary, this can be seen over time. 13 to12k down to 9K
There is a strong flip zone around 12300 so it makes sense to me that a turn occur there “if” it becomes bullish enough to get there. As I mentioned US indicies OVERSOLD AND DIVERGING on a monthly that IS substantial, I don’t know what is proping this rally up but certainly artificial !
I would love to pay my bills via printing money out of thin air too
So it seems to me, but so far I am not trying to get too attached to the indices. If I see a confirmation great, otherwise following the tape:) In the end, markets are unpredictable, what we have left is tape reading
there was a strong support level- hence the bounce off it. I am currently in a small long Gold trade. Looking for the 1325 as my first target. I was in a long NZDUSD, but got stopped out just below BE. Not a very active week on my side. Getting back in shape after the holidays
Another crazy dax session happening, unfortuantely I don’t know whats going on news wise.
Just going short
I’m long CAD
Gold at the time we spoke at 1212 area was ideal, conficting opinions sometimes.
End of month can play havoc on t/a sometimes things don’t make sense
Are u short Euro was a good call
I am not short EURUSD since it is against the major trend. I am just running the Gold position for the time being.