DAX Trade

Previously highlighted GBP/CHF as best to trade stock indices due to GBP/CHF as the currency market’s most balanced and neutral currency pair of the 28 pairs. The methodology is GBP/CHF serves as the center line to index prices. Longs above GBP/CHF and shorts below would result in profits. However, stock indices of the respective nation were designed to trade against the particular nation’s exchange rate

Today’s DAX traded 128 points and the EUR/USD traded 73 pips within DAX trading hours. DAX closed at 14775.52 EUR for the Cash Price or 17600.00 USD while Futures closed 14686.00 EUR or 17493.96 USD.

DAX rose from 14667.42 to 14808.75 while the EUR/USD dropped from 1.1987 to 1.1915. In Decimal terms, DAX rose from 146.67 to 148.08 . DAX is now arranged as a currency pair and trades most closely to EUR/CAD and GBP/JPY.

DAX rose 1.23% from the Cash Price or 0.0123 while EUR/USD dropped 51% or 0.0051. EUR/USD now traded 1.1917 or 0.011917. Imperative for exchange rates to trade and quote 6 decimal places.

DAX contains 3 vital time frames: 3 AM EST to 6 AM EST, then 6 AM to 10 AM and 10 AM to the close. From 2:30 and 3 to 6 AM, DAX and EUR/USD begin normal associations as day trades as exchange rates and DAX align properly and normally as opposite Correlations.

At 6 AM, the ECB changes interest rates and the best moves for the day are seen during the 6 AM hour.
DAX and EUR/USD then trade from 6 to 10 AM then the ECB enters the market to price EUR/USD. DAX next best trade for the hour is at ECB 10 AM. Then next comes 10 AM to close.

From 3 AM to 6 AM, DAX traded + 118 points while EUR/USD dropped 54 pips. At 6 AM, DAX dropped 72 points while EUR/USD traded 11 pips lower. From 6 to 10 AM, DAX traded 97 points higher while EUR/USD dropped 41 pips. EUR/USD and DAX separated from 6 to 10. EUR/USD rose in the last hours of trade while DAX dropped.

Maximum DAX point movements are generally located at 140 points. For tomorrow, 14923.28 represents the maximum location and shorts are located here.

Normal DAX movements are located at 70 ish points. For tomorrow, 73.88 represents normal tops and located at 14840.49. Next short for the day is located here.

To achieve 14840.49, DAX must break 73.88 divide 2 or 36.94 then 14812.46.

Bottoms are located at 14701.64 and 14680.67. Bottom for DAX is USD bottoms.

DAX is actually USD/EUR and rises with USD and falls with EUR/USD. Opposite Correlations from EUR/USD to DAX translates as positive to USD/EUR but from certain time frames.

Tomorrow’s DAX trades as 73.88, 36.94, 18.47, 9.23 and 4.61.
This translates to 14738.58, 14775.42, 14812.46, 14849.40 and Maximum at 14923.28.
Vital must break points are located at 14680.67, 14803.22 and 14870.98

DAX is traded longs and shorts in intervals at 36.94 and 73.88 for tomorrow. Slight variations exist for the next days trade but the overall point movement formula never changes.

Brian Twomey

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