How to trade on DAX

DAX is Germany’s Most popular index where the 40 biggest companies. You may gain exposure to DAX price movements with index futures and cash indices. Trading in the DAX index requires you to follow a series of steps at your end

Opening your DAX trading account

A position on DAX can be opened when you open a CFD account. With such an account you can enter and exit positions on the DAX. Since CFDs turn out to be derivatives you may speculate on both rising or falling prices by going short or long. CFDs also enable you to trade on the DAX index directly. This provides you with exposure to the top 40 stocks of Germany in a single position.

Take the first DAX trading position

There is a need to explore various positions by using CFDs. A contract for difference is an agreement to exchange the difference in price of an underlying asset. It is measured from the point of time the contract has opened as you stand to make a profit or a loss. This is dependent on the fact whether the prediction that you are making is correct or incorrect. If your prediction is correct then you are bound to make a considerable sum of money in the long run.

Be aware of what makes the DAX price move

If you are looking to trade in DAX successfully then it is obvious that you need to predict the movements. This means having a fair understanding of what influences the price that will enable you to open and close your positions for the maximum chance of profit.

Various factors influence the price of DAX. For example, fluctuating exchange rates can have an impact on the price of DAX. The positive or negative news released in the earnings report is expected to play a major role too. Be aware that any information from research is power. There is a need to use a combination of fundamental analysis and research analysis before you arrive at a decision.

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Work on the DAX trading strategy

 Any trading strategy is not always perfect as it turns out to be a recurring process where you manage your craft. First and foremost, you need to decide on a trading style. With the aid of technical analysis and weekly charts, you will be able to understand the market sentiment. Your chosen trade sentiment determines how often you place a trade and how things keep on growing.

Things you need to be aware of about DAX

The calculation of DAX is by weighing in all the 40 listed stocks by market capitalization. This means that the bigger companies with higher capitalization tend to weigh more than the smaller companies. Hence it is expected to have a large effect on the overall price index. Most of the prices of DAX are calculated automatically

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