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The Daily DAX trading strategy

Day trading can be simple. The Daily DAX strategy was designed to illustrate this premise. Two basic technical  analysis concepts are combined with the awesome testing and optimization power of the NanoTrader platform. In addition the NanoTrader provided a precise hour to open a position. Traders don't have to sit behind their screen and wait for a signal. Like all the integrated strategies in the NanoTrader platform, Daily DAX is free.

These are advantages of the Daily DAX strategy:

  • Trades a popular market index.
  • Simple and to the point.
  • Uses only key technical analysis concepts.
  • Good back-test results
  • Free in NanoTrader

1. BACK TO BASICS

Only two key technical analysis concepts are used:

  • Determine the direction of the trend.
  • Determine the strength of the trend.

A simple moving average is used to determine the direction of the trend. Another stalwart, the ADX indicator, is used to measure the strength of the trend. The NanoTrader calculated the historically 'perfect' point in time to open a position for this combination of indicators as being 13h30. if the conditions are met, a position is opened at this point in time and only at this point in time.

2. OPEN AND CLOSE A DAX POSITION

A long position is bought at 13h30 if the trend is bullish and strong. A short sell position is sold at 13h30 if the trend is bearish and strong. If the trend is not strong, the trader does not open a position.

This example shows a buy signal at 13h30. The trend was positive (price above the moving average – purple line) and strong (ADX at 50 i.e. above the dotted line indicating 25).

DAX trading

Free NanoTrader trading demo

This example shows a day without a signal. The trend was too weak (ADX below 25).

DAX trading

Free NanoTrader trading demo

The position is automatically closed at 21h30 by the flat filter if the TradeGuard is activated. The Daily DAX strategy has no stop loss or take profit. If wanted, the trader can add these manually or via the TradeGuard in NanoTrader. This is the 10-year back-test on the DAX Future:

DAX trading

Read more about the Daily DAX strategy.

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