FTSE & DAX

[kevin546]

Has anyone researched the correlation of the price action of these 2 indicies specifically at the UK open and through the morning session.

Kevin

 

[TWI]

I know that a few people trade this spread. I have looked at it and it seems like a big black hole to throw your money down. The spread seems to stay in for periods but it breaks out and back wildly.
I attach a chart to demonstrate point. Not sure there is any benefit to be gained trading this spread vs. the outrights.
I would of course be interested to know the money making technique, if there is one.

 

[kevin546]

I was considering if these markets tend to move in the same direction when the US is closed

 

[TWI]

They do tend to but the spread is very volatile. It is hard to range trade like the bonds, it is all over the place most of the time.

 

[kevin546]

Thank you

 

[noswap]

I have looked at this spread for a few years now, have seen it go from dax = ftse +1000 to dax = ftse -300. Have been trading it for the last few weeks and it has been trading dax = ftse + 370 to dax = ftse + 440 range, was easy money until Friday 9th Jan 2009 when the Dax dropped 187pips after Non Farms and FTSE dropped only 107, so my position of feeling safe long dax/ftse spread @375 is now trading at 290! OUCH! Definitely worth looking at but be careful and run tight stops! Am going to look into FTSE DJ Stoxx 50! Be Lucky

 

[AZBO]

Yes, I have worked on this for a while. Most days are profitable on condition that you take small chunks but sometimes the downside gets nasty. It needs some pretty tight and disciplined risk management which can be both rewarding and frustrating. Sometimes the position has to held for days when times get nasty.