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BOOK YOUR FREE STRATEGY SESSION NOW >>There has been a remarkable increase in the volatility of the Dax recently.
In this video, we show you two strategies (a trend-following one based on the ADX indicator and a reversal one based on the Bollinger Bands) that were able to exploit this condition to the most and make some outstanding profits (the second made over €15.000 with just one trade!)
If you want to exploit the volatility of Dax, watch the video and find out how these strategies work!
Good morning everyone and welcome back to this new video dedicated to the analysis of the systems in our portfolio.
So this week I want to talk to you about DAX. Over the last few weeks, there has been a remarkable increase in the volatility of this market and that’s why I want to show you two systems in our portfolio that have taken advantage of this volatility increase and managed to make some really excellent trades.
These two strategies are very different from each other. So let's start and take a look at this one down here.
This is an intraday breakout strategy. The levels for opening long and short positions are the high and low of the previous day. Here you can see an example in which the strategy sent an order for opening a short position exactly upon reaching the previous session’s low, which is this.
Since this is an intraday strategy, all the positions are closed at the end of the day. The system makes use of the indications provided by the ADX, an indicator that is widely used in trend following strategies. In this case, we look for trend following entries when the ADX is in a sort of compression period, that is, when its value is below a certain threshold. We do this because since the ADX indicator basically measures the strength of the directionality of a trend, low ADX values suggest that, most probably, the market will soon resume being more directional, which is the ideal condition for trend following strategies such as this one.
Now let's take a look at the report. Wow, the last trade was very good. You see it here: €6,800. This is a lot of money for an intraday trade! Obviously, we know that this also depends on the fact that DAX is a very heavy market. Fortunately, there are also mini and micro contracts available for this market. The price of Micro Dax, for instance, is significantly less than that of the entire contract. Currently, the mini and micro contracts have become quite liquid, which means that you can use them for your studies without any issues.
Okay, so this is the equity line of the system. As you can see, it's quite jagged. For sure, the strategy hit many stops but they are all compensated by these very good trades you can see here. The stop loss value is less than 50 points, which is very low especially considering that we’re trading the DAX. However, as far as this particular system is concerned, it seems to work pretty well.
Now let's move on to the second strategy, which has completely different conditions. In addition to being based on a reversal approach, this is also a multiday strategy, which is actually the exact opposite of the first strategy we've just seen. However, this system, too, has managed to make some astonishing profits.
Take a look at these two trades, the first one is long and the second one is short. They were opened and closed near the lows and highs of this sort of channel formed over the last few weeks, which somehow confirms the validity of this strategy.
The reversal entries occur when the prices are out of the Bollinger Bands. In this case, for example, as a result of this gap up, the Bollinger Bands didn’t probably have enough time to expand, so the prices were above them.
Let's add a graphic indicator to see this more clearly. Take a look. The prices were completely out of both bands, the lower and the upper. So this is the entry pattern used by this strategy.
Let's also look at the report. The equity line of the short trades struggles a little bit, although it’s still positive, whereas that of the long trades is very good and the overall curve of all the trades is currently rising quite a lot.
Let's look at some figures here... take look at the last two trades. The long one was over €10,000 and the short one was over €15,000. Wow, these are really excellent results, so why not trying this strategy for yourself?
And with that it’s the end of our video!
Let us hear your opinion in the comments please.
Goodbye everybody, see you next time!
We'll help you map out a plan to fix the problems in your trading and get you to the next level. Answer a few questions on our application and then choose a time that works for you.
BOOK YOUR FREE STRATEGY SESSION NOW >>Andrea Unger here and I help retail traders to improve their trading, scientifically. I went from being a cog in the machine in a multinational company to the only 4-Time World Trading Champion in a little more than 10 years.
I've been a professional trader since 2001 and in 2008 I became World Champion using just 4 automated trading systems.
In 2015 I founded Unger Academy, where I teach my method of developing effecting trading strategies: a scientific, replicable and universal method, based on numbers and statistics, not hunches, which led me and my students to become Champions again and again.
Now I'm here to help you learn how to develop your own strategies, autonomously. This channel will help you improve your trading, know the markets better, and apply the scientific method to financial markets.
Becoming a trader is harder than you think, but if you have passion, will, and sufficient capital, you'll learn how to code and develop effective strategies, manage risk, and diversify a portfolio of trading systems to greatly improve your chances of becoming successful.
