Dax and Dow, mutual influence, timing etc

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Old Apr 17, 2018, 2:42pm   #1
Joined Sep 2016
Dax and Dow, mutual influence, timing etc

Hi there

I find the Dax and the Dow the most interesting indicies to trade, the combination of a high number of points per % move and lower risk than some currency combinations. In trading the Dax, I often find it takes off, either in the same direction as the previous hours or the reverse, when Dow opens. Clearly they affect each other. Their correlation is statistically significant, I think it's fair to state.

Then there's the timing. Dax is of course affected by Asia before Dow wakes up, and also by what happened in Dow the evening before. And Dow is affected by what Dax has done all morning.

Well, I state these things, from experience at looking at the graphs, but I have no documentation for it at this time...

AND NOW TO THE QUESTION: Does anybody have any ideas/theories/tests/experience that can give us rules to trade from? E.g. (just a guess) "if Dax is up all morning, Dow will be up the first 2 hours", or "if Dow is higher than when Dax closed yesterday, Dax will go up from opening at least until Dow opens". I'm sure you get the idea. They of course don't have to be right 100% of the time, a nice 60-70% would be enough I think.
Any input will be appreciated...

What I can offer back is I have a good Excel model to test any such ideas, to see if any idea can be made into a consistent points-maker including the spread.

Thank you for reading this far.

Last edited by No Quarter; Apr 17, 2018 at 3:36pm.
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Old Apr 17, 2018, 10:03pm   #2
 
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The Dow, or Dow futures out of hours, will generally lead dax. Watch the relative relationship - about 2 Dow points is worth 1 dax point. You will find that Dow sometimes trades strong relative to dax - ie:goes up more than 2 points for every 1 point rise in dax or falls less than 2 points for every 1 point fall in dax. And vice versa sometimes trades weak relative to Dax.
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Thanks! The following members like this post: No Quarter
Old Apr 18, 2018, 5:08am   #3
Joined Sep 2016
No Quarter started this thread
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Originally Posted by barjon View Post
The Dow, or Dow futures out of hours, will generally lead dax. Watch the relative relationship - about 2 Dow points is worth 1 dax point. You will find that Dow sometimes trades strong relative to dax - ie:goes up more than 2 points for every 1 point rise in dax or falls less than 2 points for every 1 point fall in dax. And vice versa sometimes trades weak relative to Dax.
Thanks barjon

Anybody else?
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Old May 1, 2018, 3:34pm   #4
Joined Sep 2006
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Originally Posted by No Quarter View Post
Thanks barjon

Anybody else?
Hey there,
I trade Dax in the morning and the Dow in the afternoon.
If I see something on the Dow in the morning or the Dax in the afternoon I will take a trade. BUT.
BUT!

In the afternoons (UK time) then you're in the US zone. The American markets are king. If you see a long forming on the Dax and the DOw is tanking then in no way do you take the long in the Dax. The US indices rule the roost in the afternoon (US morning time). I agree that the Dax and Dow are excellent to trade though.

I don't have any rules regarding Asian session/Dax etc. I tend to look for where price might react from beaten traders the day before, or further back, and then just go from there.
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