How to Trade the DAX Online

by Susan Paige on April 10, 2019 · 0 comments

Everyone has heard of S&P 500, the FTSE 100, the NASDAQ, and the Dow Jones Industrial Average, but how familiar are you with the DAX 30 Index?

In this article, we are going to offer some useful tips to help you trade the DAX online. The good news is that you don’t need any previous experience!

What is the DAX?

The DAX or Germany 30 is a stock index that tracks the 30 largest companies on the Frankfurt Stock Exchange. These companies encompass three-quarters of the FSE’s market cap. At present, this is approximately 817 million Euros. Companies included in the DAX are publicly listed, are German-based, and at least 15% of their market cap is traded publicly. Companies represented on the DAX include Deutsche Telekom, Bayer AG, Volkswagen, and Deutsche Post.

You can’t buy or sell shares in the DAX itself, but you can trade on it via derivatives.

Why Trade the DAX?

The DAX is one of the most traded indices in the world. Trading spreads are tight and the index boasts high liquidity. In addition, it is relatively easy to spot trends in the DAX, which makes it good for beginners. The DAX is open for trading between 0900 and 1745 GMT.

Lots of top traders follow the DAX 30. With some preparation, you can too.

Getting Started

To trade on the DAX – or any other index for that matter – you need a trading account with a broker. Look for a reputable forex broker that offers DAX/EUR. Open a demo account, to begin with. This allows you to get used to the tools at your disposal, without risking your hard-earned money.

Factors Affecting the DAX

As with all financial markets, there are a number of factors that affect the DAX on a day-to-day basis. Fluctuations in the Euro will affect German companies trading inside and outside the EU. Right now, Brexit is having a huge impact on all things EU-related, so we can expect this to rumble on for quite some time. In addition, global and regional economics all play their part, so when President Trump announces he’s implementing sanctions against Chinese imports to the US, you can expect a ripple down effect on companies in the DAX.

Trading the DAX

The best way to tackle trading on the DAX is to analyze historical data and see if you can spot patterns and trends. Most trading platforms have a host of technical analysis tools traders can use to spot retracement patterns and potential trade entries and exits. Try them all out and see which ones are most useful to you.

Different Ways to Trade the DAX

The three main ways to trade the DAX are via derivatives, such as CFDs, futures, and spread betting. If you decide to trade futures, you’ll need to use the Eurex exchange.

Anyone can trade CFDs via a forex broker. CFDs let you speculate on price movements. This is where detailed technical analysis pays dividends. To protect your trading account, use stop losses and keep your trades small.

Use a demo account to practice your DAX trading strategies and always record your trades, so you can analyze what worked and what didn’t.

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