Tips for trading on the DAX 30

Tips for trading on the DAX 30

It is no secret that there are times during a trading day when it is good to trade and times when it is not good to trade. Experienced traders have learnt when these times are, and novice traders need to learn this information. Understanding the timing of the market will definitely improve your indices trading experience, particularly in the case of trading the DAX.

 

Investors whether they are long term or short term may be holding an investment for hours and days (short term) or weeks and months (long term). Time is both an investor's friend or an investor's enemy and therefore it is vitally important for traders trading the DAX index to interpret the time elements relating to when to trade.

 

Definite hours in the day are normally healthier for trading; some incline to be better for short positions and some better for long positions. Of course, no time pattern is fixed in stone. Nothing is fixed in stone regarding the stock market.

 

So what are the time patterns that DAX 30 index investors should be aware off?

 

    After a bank holiday the afternoon period is much more reliable than the morning period.


    Mondays, predominantly Monday mornings, are not decent days to trade as markets are "absorbing" the previous weekends trading and news happenings.

    Friday afternoon is a bad day to invest since volumes are low as many traders have gone for the weekend.

    Contract rollover days for options and futures, which happen every three months are bad days to trade.

    The afternoon period preceding rollover is always risky.

    Tuesday, Wednesday, and Thursday are decent investing days, except if there is a statement from the Fed bank or major earnings data from an important company.

    The best time for trading is 9:30 to 11 am European time, and the final hour of the day.

    Don't trade in the first 15 minutes of the day, because the market requires a period to form a trend.

    Avoid trading from 12 - 2 pm as floor traders at the exchanges take lunch and the volumes fall, while volatility takes a grip.

    According to the DTI (Diversified Trading Institute) 7.00am and 4:30pm European time are strategic times for the DAX 30. The 7am price of the DAX is a key pivot point to evaluate the sentiments other investors in the market. At 4:30 am European time, the Asian markets handover to the European markets.

    European markets handover to the American markets at 9:30pm.

    If the DAX is down on a Friday, the odds favor a down on Monday.