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Trading DAX30 CFD with an Open Range Breakout

September 25, 2018 15:11

Trading the DAX30 with the Open Range Breakout

Even though the September performance for DAX30 CFD has been mixed this year, the last chance to profit from a strong Intraday trend on the downside (with a presented strategy from one of Admiral Markets' educational webinars which help traders to reach the next level on their journey to profitability in trading within the first week of trading) was 11 September. Make sure to check out Admiral Markets' webinar schedule for all upcoming webinars.

Source: Finanzen - DAX30 Performance

DAX30 CFD

Source: DAX30 CFD - Accessed: Saturday 22 September 2018 9am CEST - Admiral Markets MT5 with MT5SE Add-on

If you are interested in trading yourself, make sure to check out Admiral Markets' most competitive conditions on the DAX30 CFD and Dow Jones CFDs, and start trading on the DAX30 CFD with a low 0.8 point spread offering during the main Xetra trading hours!

Before you are given a deeper look into the trading setup itself and the trade of 11 September, let's recall the 3 steps of the DAX30 CFD Open Range Breakout strategy (for live coverage of the trade you can also check out Admiral Markets' ESMA special webinar - which used this trading setup to illustrate the regulatory changes for retail clients):

  • Define the Open Range between 8:00am and 9:05am (CET)
  • Identify the advantage: based on the 5-min-EMA (50)
  • DAX30 CFD trades above → Long, DAX30 CFD trades below → Short
  • Trade the break of the Open Range in the 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.

Now let's go through these three steps and see how the setup would have performed on 11 September 2018:

  • The high and low between 08:00 and 09:05am (CET) can be found between 12,003 and 12,025 points, so the Open Range is 22 points wide.

DAX30 CFD

Source: DAX30 CFD - Accessed:Saturday 22 September 2018 9am CEST - Admiral Markets MT5 with MT5SE Add-on

  • As you can see in the chart above, the DAX30 CFD traded below the EMA(50) on a 5-minute time frame (blue). That means that only Short trades will be taken, and this will only occur if the DAX30 CFD breaks out on the down-side of the Open Range.

Source: DAX30 CFD - Accessed: Saturday 22 September 2018 9am CEST - Admiral Markets MT5 with MT5SE Add-on

  • As you can see in the chart above, the DAX30 CFD broke out of its Open Range and started to move strongly in the direction of the breakout.

The stop was placed at the top of the range at 12,025, resulting in a risk of 22 points. Since the setup works with a Take Profit 2R away from the entry point of the trade, a buy limit was placed at 11,959 points. The Take Profit level was hit after around one hour later, resulting in a profit factor of 44 points : 22 points = 2 : 1. To test Admiral Markets DAX offering in combination with the described strategy above register for a free Demo account today and experience the live markets risk free!

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This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.

Risk Warning

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.