For traders focused on the DAX, understanding how to navigate the European stock market open can be a game-changer. In today’s blog, we’re recapping the Trade of the Day (TOTD) video from October 24, 2024, where we break down some essential intraday trading strategies that helped us secure impressive profits during the morning session. Let’s dive into the key lessons and setups from this exciting trading day.
The Power of the Market Open
The European market opens at 8:00 AM, and it’s often where the most significant price movements occur. In this session, we saw the DAX react exactly as expected, with a sharp movement that provided a perfect opportunity for an early trade. Understanding the market's behavior around this time is crucial, as the volatility can either lead to rapid profits or losses if not handled properly.
At 8:02 AM, a buy trade was initiated at 11,943.5, with an initial stop placed at 11,941.1, representing a manageable 23-point risk. The market quickly moved in favor, and by adjusting the stop loss based on market momentum, we managed to lock in 37 points of profit within just 20 minutes. This resulted in a solid return of around 2.5% to 3%, highlighting the importance of proactive trade management.
The Art of Trailing Stops
One of the key takeaways from this session was how to use trailing stops to maximize gains while minimizing risk. As the market moved up, we incrementally shifted our stop loss, following the higher lows on the chart. This technique ensures that even if the market reverses, profits are secured. By the time we were stopped out at 11,947.1, we had locked in significant gains without exposing ourselves to unnecessary risk.
For newer traders, we always recommend focusing on smaller targets initially—such as a 10-point gain—before moving on to more advanced techniques like trailing stops. This method helps build confidence while still banking solid profits.
Avoiding Unfavourable Trades
A critical part of successful trading is knowing when not to trade. Around 9:00 AM, the market presented what could have been seen as a sell opportunity. However, following our strategy’s rules, we correctly identified that the conditions didn’t align with the trade setup—primarily due to the market moving counter-trend. Skipping this trade saved us from unnecessary risk and potential losses, reinforcing the value of a rules-based trading approach.
Another Opportunity to Profit
Later, at 9:16 AM, we spotted another promising buying opportunity. We entered long at 11,951.4 and, once again, trailed our stop effectively, securing a 34-point gain for a 1.5% profit. This consistent approach to risk management and stop loss placement allows traders to profit from market movements while keeping risk under control.
Key Takeaways for DAX Traders
- Timing is Everything: The European stock market open at 8:00 AM offers some of the best intraday trading opportunities on the DAX.
- Trailing Stops: Adjusting your stop loss as the market moves in your favor is a proven strategy to maximize profits while minimizing risk.
- Follow the Rules: Avoid trades that don’t align with your strategy to reduce unnecessary risk and potential losses.
- Take Profits Early: For newer traders, securing small, consistent gains—like a 10-point profit—helps build confidence and steadily grow your account.
- Adapt to Market Movements: Be flexible with your stop loss, allowing the market enough room to breathe without risking your profits.
Ready to Learn More? Join Our Live Webinars!
If you’re eager to dive deeper into these strategies, we invite you to join one of our live trading webinars. We’ll cover everything from the two-minute chart strategies to risk management techniques, helping you enhance your intraday trading skills. Whether you're new to trading or a seasoned trader looking to refine your approach, our live sessions will give you the tools to succeed.
Stay tuned for more insights and tips on mastering intraday trading in our upcoming posts!
