There are so many factors and reasons why DAX differs from FOREX, I will not cover them all as I will be here all day.
First of all, my last post doesn't suggest that everyone ditches the markets they are trading and all jump into DAX. My comment was aimed at multiple markets that are better suited to traders rather than FOREX in general. That could be BUNDS, GILTS, SCHATZ, DAX, COFFEE, SUGAR or whatever, there are plenty of markets to try and test your skills and strategies with. But all the books, websites/blogs are saturated with FOREX, FOREX, FOREX, FOREX to the point that it is glammed up and made out to be the best club in town to make your crust.
Take 500 random retail traders from various brokers and spread betting firms and ask them whats the main market they trade, I would put money on it that at least 85% say FOREX, ask them another question, why do you trade FOREX? Most won't be able to give you a proper answer, becasue most just started trading FOREX becasue everyone else was trading it and talking about it.
Currency trading is one of the most manipulated markets if not the most manipulated market on the planet, here is a recent news item (
http://www.bloomberg.com/news/2013-10-11/u-s-said-to-open-criminal-probe-of-fx-market-rigging.html), there are so many facotrs taking place each day within currencies that it would be impossible to keep track of them.
The volatility is a death trap in my opinion, many people will say volatility = money, thats true to a point, but most are on the wrong side of that volatility more often and its not a coincidence either.
Trader A, B, C, D, E, F and G all see trader 1 and 2 posting fancy charts and mentioning how they made this and that on the EUR/USD or GBP/USD when it rallied 100 pips then nose dived 200 pips, that opens up a stampede of hysteria that draws the 'crowed mentality' into that market, so the traders open up their charting, stick a few MA's and indicators on the screen, and then starting telling you how its going to be when they are trading multiple pairs each day.
Hey, I'm a failed FOREX trader, I own up to that, the volatility killed me, the fundamental jiggery pokery everyday killed me, I would look at the EUR/USD at Resistance, see all the technical signals to short that one can imagine, go short, then get stopped out becasue someone from the ECB or FED made some comments, or the FOREX just made one of its random pops higher with not much reasoning why.
Anyway, when I moved away from FOREX and into Indices my trading transformed(with the help of a LIFFE trader), more so with the DAX. The strategies worked better, the volatility was still there, but it was not as 'aggressive' as the FOREX. Also the manipulation was not as rife with the DAX as it is with a lot of other markets, not just FOREX, but also on the DJIA.
I mentioned on another thread that the DAX is not aggressively trading by corporates, hedge funds, pension fund etc as is the case of the DJIA and FTSE. This makes the DAX a more stable market on an intraday basis most of the time, of course it still has its wibble wobbles and no market perfectly trends. But some trading styles and mentality are much better suited to certain markets and more predictable markets.
A lot of people who fail at FOREX are not actually bad traders, its just their mentality and skills are not suited to the high volatility market swings and fundamental drivers within it.
That's why I made the comment about finding your market, finding your niche if you like, a market that actually fits your personality, a market that fits and follows your strategies more times that not. And a market that has enough but not to much volatility that you can handle.
In my opinion you can't fit all markets into one box and say all analysis fits all markets, thats not the case in my opinion. One of my strategies fails miserably on the FTSE and DJIA and FOREX, even tried it on shares, but, it works an absolute treat on the DAX, and I personally make good money from that strategy, but if I went back to applying it on FOREX or the DJIA, I would be out of pocket most weeks.
I don't regard myself as a bad trader, I also don't regard myself as great trader, I do however regard myself as a trader who found his market, a trader who worked his ass off learning his market, and a trader who understands that you don't need to be as jack of all trades and master of none.
Finding your place and your market, and understanding your market is just as important if not the most important aspect of your trading. Who cares about making 100 pips a day, or trying to trade 5 or 8 pairs a day, attempting to draw fancy lines on charts and complex trading strategies won't get you far, in fact, chances are you will just become another statistic smudge on your brokers balance sheet.
DAX provides me with 20-50 points a day most of the time, of course I have my bad days and I have my good days, but becasue I spent the time learning my market and understanding that this market fits my mentality and style, I have been able to make a living from it. If I were still trading FOREX, I would just be another statistic that gets chucked around, 90% fail, 10% win? I would defiantly still be in the 90% of fails.
I'm not claiming to be Mr Know it all, phewww no chance!!! I said this before and will say it again, I'm a one trick pony, I trade the DAX 99.9% of the time and I have failed in every other market I have traded, so I'm certainly not the greatest trader around, nor am I a smart ass. But if I can give one bit of advice, then I would say get out there and check out a range of other markets away from FOREX, you may be surprised at the opportunities it opens up for you, and you never know, you may find that one market that just feels right for you.
