Buy DAX after it just broke the year 2021 and 2022 lows?

  • DAX is a German stock market index that includes 40 of Germany’s largest blue chip businesses listed on the Frankfurt Stock Exchange
  • On many occassions, it has been a leading indicator for other stock markets
  • It is dancing around the historic lows of year 2021 and year 2022
  • Stops are most likely waiting to be triggered below this historic low, and new bears will start entering short positions
  • However, the institutions selling those shorts may be ready to stop those new bears out
  • Strong hands that may be waiting to go Long, even temporarily, may be waiting to buy, as well
  • This is a contrarian trade idea so you need to decide if it fits your personality and risk appetite
  • Still, we always set a stop loss, as shown in the image below the following video

  • Enter the Long in 3 buys (scale into the Long trade), 1st at 12405, 2nd on 12355 and the 3rd on 12305
  • The average entry price for this DAX Long, if all 3 orders get filled, is: 12355
  • Stop Loss: 12147
  • Take Profit: 13187
  • 4 to 1 reward vs. risk, trade the DAX index or the DAX futures at your risk only
  • Correction to the chart in the video: The price levels are not at the COVID crash low but below the lows of 2022 and 2021, which are significant

DAX trade idea after it broke the COVID low

IMPORTANT SIDE NOTE:

At your discretion, you can follow the DAX price action, entries, stop loss and take profit target, as mentioned above. Instead of buying DAX, or selling if stopped out, or selling when DAX  take profit  target is reached, they could decide to buy and sell a US index or even major stock like Apple. Most likely, these assets will be correlated to the price action of the DAX.

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Technical Analysis

In financial trading, technical analysis refers to the method of studying the previous history and price movements of an instrument, such as foreign exchange, stocks, commodities, etc.Key determinants include an asset’s historical price action, chart patterns, volume, and other mathematical based visual tools, in order to predict future movements of that instrument. Traders who utilize various means of technical analysis are known by a variety of terms, such as technical traders, technical analysts, or technicians.The crux behind technical analysis is the notion that past performance of a financial asset is a potential evidence for future activity. Unlike fundamental analysis, technical analysis does not bother with the causes of price fluctuations; it only deals with its effects. Therefore, technical traders diligently observe historical charts of the instrument they’re interested in trading. By applying a number of techniques, technical analysis ultimately helps forecast how prices will act, sometimes in relation to time as well. There are a multitude of visual tools available for the technical trader, with the most popular of them included in all of the major broker platforms today. Understanding Technical AnalysisTechnical analysis itself consists of a number of different methods, which generally fall into two main categories – leading indicators or lagging indicators. Leading indicators refer to those charting tools which enable the trader to predict the movement of an asset before it actually occurs. Such leading techniques include Fibonacci, pivot points, trend lines, divergence and harmonic trading, and are popular with traders who prefer to trade reversals. Lagging indicators are those visual tools which enable a trader to take advantage of a strong trend, entering upon it whilst in formation; such tools include the MACD, the Awesome Oscillator, and moving averages. Technical traders don’t all use the same tools of course, and even a trader that uses a particular indicator. For example, the Stochastic Oscillator will probably use it in a different manner to another trader using the same indicator or set of indicators, making technical analysis extremely subjective. Having said that, there is merit to technical trading, and as unintuitive as it may seem, previous price patterns do appear time and time again.As an increasing number of traders seek specific market points, the probability of those points holding significance also increases.

In financial trading, technical analysis refers to the method of studying the previous history and price movements of an instrument, such as foreign exchange, stocks, commodities, etc.Key determinants include an asset’s historical price action, chart patterns, volume, and other mathematical based visual tools, in order to predict future movements of that instrument. Traders who utilize various means of technical analysis are known by a variety of terms, such as technical traders, technical analysts, or technicians.The crux behind technical analysis is the notion that past performance of a financial asset is a potential evidence for future activity. Unlike fundamental analysis, technical analysis does not bother with the causes of price fluctuations; it only deals with its effects. Therefore, technical traders diligently observe historical charts of the instrument they’re interested in trading. By applying a number of techniques, technical analysis ultimately helps forecast how prices will act, sometimes in relation to time as well. There are a multitude of visual tools available for the technical trader, with the most popular of them included in all of the major broker platforms today. Understanding Technical AnalysisTechnical analysis itself consists of a number of different methods, which generally fall into two main categories – leading indicators or lagging indicators. Leading indicators refer to those charting tools which enable the trader to predict the movement of an asset before it actually occurs. Such leading techniques include Fibonacci, pivot points, trend lines, divergence and harmonic trading, and are popular with traders who prefer to trade reversals. Lagging indicators are those visual tools which enable a trader to take advantage of a strong trend, entering upon it whilst in formation; such tools include the MACD, the Awesome Oscillator, and moving averages. Technical traders don’t all use the same tools of course, and even a trader that uses a particular indicator. For example, the Stochastic Oscillator will probably use it in a different manner to another trader using the same indicator or set of indicators, making technical analysis extremely subjective. Having said that, there is merit to technical trading, and as unintuitive as it may seem, previous price patterns do appear time and time again.As an increasing number of traders seek specific market points, the probability of those points holding significance also increases.
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