DAY TRADING DAX STRATEGY

THIS EBOOK BELONGS TO SAFEKEY CAPITAL

Compiled by Safekey Capital Team
Email: [email protected]
Contacts: +(27) 81 411 3811
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Release Year: 2018

Copyright 2018 by Safekey Capital

All rights reserved. This book or any portion thereof may not be
reproduced or used in any manner whatsoever without the express
written permission of the publisher except for the use of brief
quotations in a book review.
 Table of Contents
Chapter 1: Introduction to Dax

• Definition of Dax

• How Dax is traded

• Dax in different brokers

Chapter 2: Directional Bias

• What is directional bias

• Your Chart
• Direction Change

Chapter 3: The Asian Session

• Implementing the Asian Session

• Difference the Asian range makes

Chapter 4: Trading Dax in London Session

• Dax Bullish Setups

• Dax Bearish Setups

Chapter 5: Risk Management

• Stoploss
• Take Profit
• Risk Reward
 Chapter 1: Introduction to Dax

1. Introduction
I know many of you out there don’t have an idea what is Dax, we
always posting about it, trading it and seem to enjoy trading it. What
makes Dax special? I will tell you all that and the advantages and
also disadvantages of trading Dax. I insure you that by having this
book, you are already ahead of many traders out there, the
information in this book is worth a lot and I would like you to put it in
good use. PRACTICE PRACTICE PRACTICE!!!!!

2. What is Dax
Dax also known as German 30 is a blue-chip stock market index that
consist of the 30 major German companies trading on the Frankfurt
Stock Exchange. Dax measures the standard of the 30 largest
companies in Germany in terms of volume and market liquidity.

3. How can you trade Dax?

Dax can be traded like any other forex currency pairs through forex
brokers. You can simply trade Dax from your computer or mobile
phone. Brokers provides us with price charts of Dax, we can use
those charts to implement our technical analysis strategies to predict
future prices of Dax.
 The advantages of trading Dax is that it is very volatile meaning you
can be able to make a lot of money as it has large ranges. Dax
moves more than 1000 pips in a single day. In a good day it can have
a price movement of around +3000 pips in a single day.

Of course, while trading dax can be rewarding, it can also be risky for
those who don’t have the right strategies to trade it. As much as you
can make a lot of money trading it, you can also lose all your money.
This book will help you trade dax the right way to minimize your risk
and maximize your profits trading only dax.

4. Dax in Brokers
Many online forex brokers offer Dax as part of their trading
instruments. You can find Dax under indices in most brokers.
Different brokers offer Dax in different Symbols, the most used
symbols for Dax in most brokers are Ger30 and DE30.

Another important this is that Dax lot sizes, they are not normal lot
size we are used to when we are trading forex currencies. With Dax
the lot sizes different with the broker. Most brokers allow you to trade
Dax with 1.00 lot size, in truth is that 1.00 lot in Dax is the same as
0.10 lot size in forex currencies If you are trading trading Dax with
1.00, you will be using 0.10 in reality.

An Example of Dax Charts with different Symbols:

This is a Dax daily Chart from broker A. The symbol is DE30
This is a dax daily timeframe chart from broker B. The symbol is Ger30

Now that you know what is Dax and where to find it, let get to the strategy. I
broken this strategy down for you to follow this procedure. This will be what
you do everyday trading Dax. GOOD LUCK!!!!!!!!!!!!!!!!!!!
 Directional Bias
1. How to Identify Directional Bias
This is the most challenging thing in trading, to identify where the
market is going. I won’t go in much details with this as there are many
ways to identify the direction of the market. Directional bias simply
means the direction of the market, where is the market going. Is it an
uptrend or a down trend? This is the challenging part in trading.

But I will try to simplify things for you. The are many ways to identify
the trend of the market, I mostly use advanced price action for that
which takes time to learn, that but in this book, I will replace the price
action with two exponential moving averages to make things easier
for you. Since this is a day trading strategy for dax, we will look for
directional bias on our H4 chart. NB: You can also use the Daily
chart.

2. Exponential Moving Averages

We will use these two moving averages:
• EMA – 9 Period (blue color)
• EMA – 18 Period (Purple color)

I want you to put those two moving averages on your H4 chart. Your
chart must look like this:
This is an easy way I can teach you to identify directional bias of the
market. If I had to show you how to do it with price only, I would need to
write 100 of pages to explain that and it will take you months to grasp it, so
this is the easy way. I know we using indicators.
As you can see from the above chart, we have our two moving averages. I
suggest you put them on a separate H4 chart because you won’t need
those moving averages on the lower timeframes. We only need moving
averages on the H4 chart to identify the direction the market is going. We
are using the H4 or Higher timeframes because the trend tends to hold
longer in higher timeframes than in smaller timeframes.

• When 9 EMA is Below the 18 EMA – We look to sell Dax in the lower
time frames.
• When 9 EMA is above 18 EMA – We look to Buy Dax in the lower
timeframes
 3. Directional Bias Change
• To confirm a directional change for bearish setups, we first have to
wait for a H4 candle to close below both 9 and 18 EMA

Example:

Once H4 candlestick closes below our moving averages, its confirmation

that the market is going to trade lower. You want to be a seller when that
happens. You will then look for sell setups on the M15 chart to get entries.
 • To confirm a directional change for bullish setups, we first wait for a
H4 candlestick to close above both 9 and 18 EMA.

Example:

Once H4 candlestick closes Above our moving averages, its confirmation

that the market is going to trade higher. You want to be a buyer when that
happens. You will then look for buy setups on the M15 chart to get entries.

• If you find it hard to identify the trend change on the H4 chart, you
can also use the daily chart, the higher the timeframe the higher the
probability of getting the direction right always.
 Daily Chart example:

Direction of the market is the most important thing in every strategy, you
have to know where the market is going, that way you will know which side
of the market to be on. Now that you know how to get a directional bias, we
then go to the main strategy to trade Dax every day. This strategy is
consistent but then again it doesn’t mean you get to find setups every
single day. Remember trading any market we have to wait for certain
setups to form. The Daily chart and H4 chart are our directional bias
timeframes, we do not execute trades on them.
 The Asian Range

1. Implementing the Asian range

• The Asian range simply is the price between the high and the low
formed during the Asian session.
• The Asian session starts from 1:00 am – 7:00 am (GMT+2)
• Asian range is typically small compared to other trading sessions like
London and NY ranges
• We use the M15 timeframe to identify the Asian range

2. Difference the Asian session makes

• The Asian session helps us to see what price is doing from
accumulation, manipulation and distribution.

• Example: Clean M15 chart vs Asian range M15 chart

Example A: Clean Chart

This is a normal price action chart on the M15 chart, a normal trader will not
see what was happening the on the chart. They will only spot that price was
falling nothing more.
Example B: M15 chart with Asian range
Notice how having the Asian range in our chart makes the difference? Now
a trader can see that price was consolidating, then stop hunted the Asian
high as manipulation of price. After the manipulation, price dropped for the
rest of the day. So, the Asian session helps us to enter the market either
above the Asian high if the market is bearish or below the low if the market
is bullish. This is how you identify the Asian range. The second step of Dax.

• More Examples:

Clean M15 chart

 M15 chart with Asian range

Asian Session Range Diagram:

 Trading Dax in London Session
This strategy involves trading Dax during the London session. Most of our
setups form during the London session right after the Asian close. London
session opens at 10:00am (GMT+2) South African time. Dax moves mostly
during the London session and the New York session in the afternoon. Our
strategy requires us to analyze the market right after the Asian close at
7:00am (GMT+2) time.

Dax Bullish Setups

What we look for is a stop hunt at the Asian low when the market is bullish.
Meaning between the Asian close and London open we will see a false
move down. That’s when we buy Dax if we see the Asian low being broken.
Diagram:
 For us to buy Dax in a bullish market, we wait for price to break the
Asian low to clear the stop losses in the Asian low. Once price has
broken the Asian low, it is a discount price, we are safe to buy. Your
stoploss will be set based on your risk management but it must be at
least 500 pips below the Asian low.

Chart Examples:

Same thing happens over and over, the market makers are doing the same
thing every single day. You want to see same thing happening for you to
get a setup setup.
This doesn’t mean the setup will be the same every day, some days you
won’t be able to find the setup, but most days of the week you will find it
and when you do, it will pay you handsomely. Like on this chart below, the
setup is there but hidden. In bullish conditions, it is safe to enter exactly at
the Asian low or below, not above it.

Here is an example where price went to the Asian low but not deep below
the Asian low, it just touched the Asian low then went up. It doesn’t mean
you could have traded the setup. From the Asian low to below it, it’s a safe
zone to enter your buy trades.
Summary:

• Daily or H4 directional bias is bullish

• Drop down to M15 chart
• Identify Dax Asian range
• Mark the Asian low
• Wait for price to trade on/below the Asian low
• Enter a buy order below the Asian low
• Set your stoploss and take profit
Dax Bearish Setups
What we look for is a stop hunt at the Asian high when the market is
bearish. Meaning between the Asian close and London open we will see a
false move up. That’s when we sell Dax if we see the Asian high being
broken. Diagram:

For us to sell Dax in a bearish market, we wait for price to break the
Asian high to clear the stop losses in the Asian high. Once price has
broken the Asian high, it is at premium price, we are safe to sell. Your
stoploss will be set based on your risk management but it must be at
least 500 pips above the Asian high.
 Chart Examples:

Once you see price trading above the Asian high in a bearish market, it is
an opportunity to sell at a premium price point. This setup happens almost
every day, this is how price on Dax moves.
As you can see that this strategy you will be doing the same thing everyday
over and over, that is where you will gain consistency. The is no need to
use hundreds of indicators to trade Dax. You just need to use price action
and time. All these setups I have shown you are happening in London
session after the Asian session closes. So, it shows that the market marker
is doing the same thing over and over in trading Dax.

This doesn’t mean you will get a setup during London session only,
sometimes you will get a setup during New York session, Patience is
required in trading. We get paid to wait for a perfect setup. What I can tell
you is that you don’t need to trade every day. One Dax setup a week is
enough to make a living off trading Dax only.
Example of NY sell session Setup:

Summary:

• Daily or H4 directional bias is bearish

• Drop down to M15 chart
• Identify Dax Asian range
• Mark the Asian high
• Wait for price to trade on/above the Asian high
• Enter a sell order above the Asian high

• Set your stoploss and take profit

 Risk Management

• Always Risk less than you can potentially make.

• Make sure your take profit is always 2 times greater than your
stoploss.
• Use risk reward of 1:4 at least.
• You will not win every trade you take on Dax but you can win most of
them with this strategy.
• Maximize Profits and Minimize losses

Examples of risk reward management:

 • Always risk bread for a car, not the other way around.
• Use maximum 500 pips stoploss
• Always trail your stoploss
• If the is not clear setup, you do not trade.

I hope you find this book helpful and it improves how you trade. The
information in this book has value but its also limited as I had to summarize
too much information and to make it easy for you to use, I hope you put it in
good use. This book will only be valuable to you if you put in the work to
practice in in your chart, I promise you, will gain consistency in trading Dax.
The only way to get the full information is to join our mentorship. That is
where you’ll get full advanced price action strategies through our webinars
and over 100 of price action videos. Investing in your trading knowledge is
the best investment you can ever make. Freedom is a choice!!!!!!