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Applying the Open Range Breakout strategy to the DAX30

June 12, 2019 12:00

All in all, the DAX30 CFD had a tumultuous last week of trading in May. Particularly regarding the announcement of Google banning Android services on Huawei devices pushing equities downward, since fears among market participants arose that China could begin to attack Apple's presence in the Chinese market.

In this context, it is probably worth noting that Apple has a weight of a little more than 10% in the NQ100 CFD, having the potential to make not only the US index, but also European equities like the German DAX30 CFD index, vulnerable to a sharper drop.

Source: Admiral Markets MT5 with MT5-SE Add-on DAX30 CFD daily chart (between February 21, 2018, to June 4, 2019). Accessed: June 4, 2019, at 11:00pm GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.


As readers can imagine, it was possible to be profitably positioned in this elevated volatility environment on the short side, thanks to a strategy defined in one of Admiral Markets' educational webinars aiming on helping traders to reach the next level on their journey to profitability in trading and profit from the bearish action (check Admiral Markets' webinar schedule for all events).

But before we go into further detail, let's recall the 3 steps of the DAX30 CFD open range breakout strategy (for live coverage of a similar trade check also Admiral Markets ESMA special webinar which used this trading setup to illustrate the regulatory changes for retail clients):

  1. Define open range between 8:00am and 9:05am (CET)
  2. Identify the advantage: based on the 5-min-EMA (50)

    DAX30 CFD trades above > Long, DAX30 CFD trades below > Short
  3. Trade the break of the open range in direction of the identified advantage

    Stop above/below the high/low of the range (= 1R), take profit: 2R away from the entry point of the trade


In the following, let's go through these three steps and see how the setup would have performed on May 28, 2019:

  1. The high and low between 08:00 and 09:05am (CET) can be found between 12,083 and 12,121.5 points, so the open range is 38.5 points wide.

Source: Admiral Markets MT5 with MT5-SE Add-on DAX30 CFD 5 minute chart (between May 27, 2019, to May 29, 2019). Accessed: June 4, 2019, at 09:30am GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.


  1. As you can see in the chart above, the DAX30 CFD traded below the EMA(50) on a 5-minute time frame (blue line). That means that only short trades will be taken and only if the DAX30 CFD breaks out on the down-side of the open range.

Source: Admiral Markets MT5 with MT5-SE Add-on DAX30 CFD 5 minute chart (between May 27, 2019, to May 29, 2019). Accessed: June 4, 2019, at 09:30am GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2014, the value of the DAX30 CFD increased by 2.65%, in 2015, it increased by 9.56%, in 2016, it increased by 6.87%, in 2017, it increased by 12.51%, in 2018, it fell by 18.26%, meaning that after five years, it was up by 10.5%.


  1. As shown on the chart above, the DAX30 CFD broke out of its open range on the downside, and started to move in the direction of the breakout on the downside.

    The stop was placed at the top of the range at 12,121.5 resulting in a risk of 38.5 points.

    Since the setup works with a take profit 2R away from the entry point of the trade, a buy limit was placed at 12,006 points, 77 points away from the entry point.

    The target was hit within the next hour, resulting in profit of 77 points and a profit factor of 77 points : 38.5 points = 2 : 1.


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  1. This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
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  3. Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
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