In this video, we dive into two different strategies that have been delivering great results on the DAX index.

The first is a counter-trend strategy that buys during market weakness and sells during strength, while the second is a trend-following strategy that rides the wave.

Since January 2024, using one DAX futures contract, these two approaches have generated more than €42,450 in profits.

Want to learn more about how these strategies work?

Watch the video now to uncover:
•The core rules behind these strategies
•A breakdown of their performance
•Tips on how to effectively trade the DAX future

Enjoy watching! 😉

Transcription

Introduction

Welcome to this video! Today, we'll dive deep into the performance of two strategies on DAX futures, which have been out of sample for several years now.

We'll also go over the basic rules of these strategies, focusing on the trigger points, with the hope that it might inspire you to develop new strategies for this market.

It's important to mention that we're dealing with the main European stock future and that our strategies were developed for the trading session that goes from 8 AM to 10 PM Exchange time (Germany).

Indeed, although in recent years, the trading session has been extended, we focus on the shorter session as it offers interesting opportunities, such as capitalizing on potential gaps.

With that said, I'm one of the coaches at Unger Academy, and let's get started by analyzing the first strategy, which features a straightforward trigger.

DAX Strategy 1 - Reversal

We're working with a 15-minute time frame here. And if the price crosses above the low of the previous session—as you can see here—meaning if it closes above this low after initially being below it, we'll enter a long position, as shown in this trade example.

For short entries, the approach is just the opposite. So, we're looking for the price to cross below the high of the previous session, at which point we enter a short position.

It's worth noting that several filters have been added to this strategy to improve the average trade.

Additionally, there are more filters applied to short trades than long trades because we are dealing with a stock market, which typically trends upwards over the long term.

Let's now take a look at the strategy's performance, starting with the equity line.

Right off the bat, we can see a very positive trend in the equity curve, which faced some challenges in the early months of 2023 but has recently recovered from the drawdown and reached new highs.

We can observe that this strategy performs well on both the long side, as seen here, and the short side.

However, there are fewer trades here since, as mentioned earlier, there are more filters applied to the short side.

Now let’s take a look at the total trade analysis.

Here, we see that the strategy doesn't execute a large number of trades, around 590 to be exact, but the average trade is quite substantial at 1,380 euros, which is well-balanced between the long and short sides.

Looking at the annual returns of the strategy, as shown here, it's clear that this is a consistent strategy. It had a rough patch in 2023, but 2024 has been a very positive year, bringing in over 31,000 euros in profits, although these numbers don’t account for trading costs.

DAX Strategy 2 - Trend Following

Now, let's move on to the second strategy I have right here.

This strategy operates with a logic that's the opposite of what we saw earlier.

While the previous strategy was about buying on weakness and selling on strength, this one is about doing the exact opposite—riding the trend after a move in a specific direction.

On the chart with a 15-minute time frame, you'll notice the Bollinger Bands.

As you can see, when the price crosses above the upper band, a long trade is initiated.

Conversely, short trades are initiated when the price crosses below the lower band.

This strategy also incorporates a time window and additional filters aimed at enhancing performance, which we'll analyze now.

Let's start, as usual, with the equity line.

Here, we notice a generally upward trend that went through a "dark phase" from 2018 to 2020, but then rebounded impressively, maintaining the same consistency observed during the in-sample period.

We also see that the long side performs quite well, and the short side, arguably even better, still exhibits excellent consistency and allows us to take advantage of bearish phases in this market.

Let's move on to the total trade analysis, where we see about 1,000 to 1,100 trades, slightly more on the short side than the long side.

This characteristic is quite interesting, especially considering the underlying asset being traded.

Regarding the average trade, we see a value of around 720 euros, which is also well-balanced between the long and short sides.

Lastly, analyzing the year-by-year returns, we clearly see a stagnation period in 2018 and 2019. However, all subsequent years have closed with solid profits.

Notably, 2021 saw 41,000 euros in profit, 2022 brought in 53,000 euros, and 2023 yielded 51,000 euros.

Conclusion

So, moving forward, we need to keep developing strategies to uncover new edges in the market while monitoring and potentially utilizing these existing strategies.

That's it for today. If you're interested in topics like these, feel free to click the first link in the description, and we'll see you in the next video.

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