FTSE 100 or the DAX for day trading?

Hi all, I need some advice form you Indices experts

I day trade full-time with FX on 5 min charts but the method I use works well on Indices and oil Over the past month I have monitored the Dow/FTSE100 and the DAX and realized that the 3 (especially the FTSE and DAX) move in a fairly close correlation.

With IG I can SB the FTSE or DAX for £1 per point and have a spread of 1 point, with these two having a similar price action is there a clear reason for choosing one over the other.

I use the signal bar from the TSD forum, and as type, on friday I see it showed that the DAX had a daily average range of 104 points and the FTSE 96 so again not too much in it. I just wondering if there is something you guys know that a FX trader is missing and that would help me better choose. I only monitor 8 instruments 5 FX pairs, oil and the 2 Indices I'll now choose, that are likely to be the DOW and either the DAX or FTSE. Thanks for the advice in advanced as its all appreciated........!!

Mate,

Ask any trader in the City and he will tell you that historically FTSE has been considered a more defensive = less volatile index than DAX.

I will have to note here that i am much more of a swing trader rather than intraday, and i tend to stay in most of my positions for several days. Therefore my stop-loss management inevitably bolis down to "daily volatility".

I am attaching 2 charts here showing 5, 10 and 15-day historical volatility of FTSE and DAX. Even though 15-day historical vol on FTSE used to be confined between 10 and 20, while DAX was more like between 15 and 25, very lately the situation changed. As of today, 5, 10 and 15-day gauges of historical vol for FTSE are 16,30 and 26 respectively, while for DAX they are 11, 26 and 22.

This is largely due to 1) BP and 2) high % of banks in the composition of FTSE.

AS absurd as it will sound to any City fossil , FTSE is a more volatile index than DAX these days. This being the main reason why so many people get shafted on FTSE lately, as they still make their stop-losses too tight.

CW


PS - mate i just noticed you are mostly an FX lad. Have you ever looked at Swiss MIG bank? I have some good relationship there and can help you with account opening at MIG if that is of any interst to you.

ftse follows the dollar index......inversely.watch eurusd,that ia the main constituent of dollar index

Thanks guys for the help. I'll try the FTSE for a few weeks and monitor the Dax along side to compare.....

silverpuma said:

Over the past month I have monitored the Dow/FTSE100 and the DAX and realized that the 3 (especially the FTSE and DAX) move in a fairly close correlation.

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Yes, they move together (and there are many others that join the band: ES, TF, YM, CAC...).

In my view when they do not move in unison (in short time frames) that is mostly due to random moves. Therefore it does not really matter which is chosen.

Is it the futures or the stocks that move index (short term)

http://www.cnbc.com/id/37560147/The_World_s_Most_Infamous_Rogue_Traders?slide=1

A lot of times DAX breaks out later than FTSE 100, if you missed an entry point of FTSE 100 breakout you can watch DAX.

I think it will ultimately come down to your personal preference and depend on what you can read better. Have you also looked at S&P, Dow or Nasdaq?

kalott said:

Is it the futures or the stocks that move index (short term)

News Headlines

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That's a complicated relationship, both to some extent even though the futures run as a self contained contract.

There is something about the order flow action in the DAX which I definitely prefer over the FTSE 100 or even the FESX. I have traded the DAX for many years now and like the CL it has very good price/order flow action with many intra-session trends to work.

DAX Price/Order flow action -

Images | ChartHub.com

the dax is more volatile i have found. however if you like volatility try the ITA 40. its a beast

Generally DAX isn't worth trading until after the FTSE opens (in terms of point movement). That being said I still prefer trading the DAX. There is a 'follow the leader' issue as the Dow tracks the DAX which tracks the FTSE until the American markets open properly after lunch. Although I don't normally trade the FTSE I can say that if the DAX hits a pivot or Resistance/Support level, it has a reverberation on the movement on the Dow e.g. if DAX hits Resistance level then the Dow will also slow down or reverse trend with it.

Just my 2 pence

echizen said:

Generally DAX isn't worth trading until after the FTSE opens (in terms of point movement). That being said I still prefer trading the DAX. There is a 'follow the leader' issue as the Dow tracks the DAX which tracks the FTSE until the American markets open properly after lunch. Although I don't normally trade the FTSE I can say that if the DAX hits a pivot or Resistance/Support level, it has a reverberation on the movement on the Dow e.g. if DAX hits Resistance level then the Dow will also slow down or reverse trend with it.

Just my 2 pence

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Doesn't anyone trade the eurostoxx? Hardly ever hear it mentioned.