Why Trade the German 30

Often I’m asked what and where, as a new trader should I start trading?

 

Whilst the answer could be ridiculously long winded… it’s far easier to keep it short and sweet.

 

So I’ll say, take a look at the the German 30

 

Why trade the German 30?

 

I personally like trading the German 30 DAX… but why should you and why do I recommend starting out there?

trade the German 30

 

Well firstly

the German 30 [DAX] is a very fluid market. There are opportunities to trade most days for most traders using anything from 5 minute charts up to 1H.

 

Obviously the longer time frame chart produce trading action on a day to day basis, but you can still catch plenty of good moves.

 

For those that want to trade the 4H and daily charts the trades can keep you in from a few days to months at a time.

 

Basically, the DAX creates good trading opportunities for most trading strategies and styles.

 

Secondly…

It’s the best of both worlds. By that I mean it moves enough to create ample profit each month in terms of points gained. It moves more than than the FTSE but less than the DOW [on average]

 

This means that you can trade with a relatively modest bank, can make good gains and also avoid the larger stop losses that you often need to trade the faster moving DOW.

Thirdly…

Multiple strategies can be used when trading the German 30.

 

From simple moving averages to just using the MACD… from price action trading to just trading the first hour, there is more often than not a system or strategy that can be implemented on a regular basis with a greater upside than there is downside over time.

 

Fourthly…

Bank sizes to start trading the DAX can be minimal.

 

Many of the the spread betting companies lowered their minimum stakes after the clamp down.  You can trade from 0.50p a point at reputable companies like CMC.

 

This means you can start out with a smaller bank to see if trading is going to be for you.

 

Fifthly…  

The spread is small. Trading the DAX offers you good value when it comes to the spread.

 

The spread is what the spread betting companies charge you to open a trade.

 

This means that you can enter a profitable trade quicker than other markets but also offers you the flexibility to be in and out the markets if that is your trading style without having to keep paying a hefty spread fee.

 

Sixthly…

The margin required to trade the German 30 has been kept modest in most cases. So once you open a trade your whole bank is often not needed to cover the position.

 

Obviously this all depends on your stake size and bank size. But if you are sensible it is easier to trade responsibly in most cases.

 

If you compare the margin and spread to trade the DAX against the margin and spread to trade Crypto currencies like Bitcoin you’ll clearly see that the DAX gives you good value overall.

 

Seventhly…

Even if you are using a practice account the DAX can really give you a good feel of how trading and financial spread betting works.

 

You can test out your strategies in real time with different time frame charts to see what type of trading is going to suit you best.

 

Because the DAX moves a lot more [in one direction or another] than most currencies, you’ll get a very realistic idea of how and why the markets move as they do.

 

Eighthly…

You can grow your bank trading the German 30 quicker than you can trading other markets.

 

This last point sort of encapsulates many of the above points.

 

Because of the fluidity of the DAX, trading it can result in building your bank faster than if you were trying to trade other markets.

 

When you have found a good trading strategy to use, 30% gains on average in a month can become quite realistic.

 

Obviously you are not going to make that guaranteed from one month to the next, but if you can double your bank every 6, 8 12 or 24 months then you could be onto a good thing indeed.

 

My Reasons for trading the German 30

 

The points above are certainly why I recommend taking a look at trading the German 30 DAX above other markets to new traders.

However, only you know what it is you are looking for when it comes to trading the financial markets.

 

Of course there are many other trading opportunities in many other markets that become available each and every day.

 

But certainly when you start out trading, you won’t go far wrong with getting a feel for how the markets work and move when looking at the DAX.

 

Remember too, you can open a dummy account to learn how to trade without risking a penny.

 

Whilst this will not be a substitute for the emotions that you will feel when it comes to using real money to trade. It still offers a good insight to trading the German 30 and indeed spread betting overall.

 

If you want to learn how to trade the German 30 successfully then be sure to check out my free DAX trading strategy HERE.