THE LITTLE E-BOOK OF

DAX
FOLLOW YOUR TRADING INSTINCT

BY

Colibri Trader
 The
Beginning
The Base date for the DAX is 30
December 1987 and it was started
from a base value of 1,000. The
Xetra system calculates the index
after every 1 second since 1
January 2006..
 DAX COMPANIES

DAX is Deutsche Borse’s It comprises the 30 largest

blue chip index for the and most actively traded
German stock market- one German companies
of the most efficient stock
markets in Europe.

PRICING EUREX PURPOSE

Prices are taken from the The Eurex, a European DAX Futures are highly
electronic Xetra trading electronic futures and liquid instruments that are
system. options exchange based perfectly suited to meet
in Zurich, Switzerland with your needs in directional
a subsidiary in Frankfurt, trading and for arbitrage,
Germany, offers options
(ODAX) and Futures as well as for hedging and
(FDAX) on the DAX from performance

DAX INFO
30 GERMAN COMPANIES
 EXCHANGE

•
WHAT IS AN EXCHANGE
An exchange is a marketplace where buyers and sellers come together to
trade. But it is not the usual type of marketplace. Take a look around on any
cash or derivatives market: you will not find a trace of the goods that are
being so busily traded.
 2015
DAX closes above
12,000

1997
XETRA established the beginning of
a new era of exchanges

1585
Organized Securities Market

DEUTSCHE BÖRSE
DAX VERSIONS
COMPARISON OF THE TWO VERSIONS

PERFORMANCE
 INDEX VS PRICE INDEX

Commonly Quoted

Perfomance

Dividends Counted
MILESTONES
The beginning…the birth of DAX

1992
1988
1958
1820
1585 Renaming of
Introduction of Frankfurter
Listing of first DAX Wertpapierbörse
foreign share AG to Deutsche
First share in Börse
Birth of the Frankfurt Frankfurt-
Stock Exchange Austrian
Central Bank
MILESTONES
This century

2014
2011
2009
2007
2001 Starting the “7
Migration of the Market
Increase of the floor trading to Technology
interest in the Xetra Family” including
Acquisition of trading
STOXX Ltd. to technology
IPO of Deutsche ISE architecture T7
50% plus one
Börse AG share
DAX
Trading Secrets

TIPS
The tips presented in this e-book are not to
be taken for granted. They represent
assumptions based on past data and
therefore cannot guarantee future results.
Statistics is not the most consistent of all
sciences…
TRADING DAYS
Consistent success doesn’t mean overtrading

Mondays
Mondays- especially
Monday mornings are not
Bank Holiday
After a bank holiday, the
the best days to trade
DAX. This is because it is
Fridays
afternoon period is much Friday afternoon is a bad
absorbing the news from day to trade DAX since
more reliable than the the weekend and
morning period volumes are low as many
“establishing” direction traders have left their
desks already

Times to trade
Certain times are better to trade
DAX than others- the first two hours
of the European session; then the Rollover
first two hours of the US session Contract rollover days for
bring the most market participants options and futures, which
happen every three
months are bad days to
trade DAX
TRADING TIMES
Trading is a game of patience

7:00 and 16:30

According to the DTI, 7:00 and 16:30
European time are strategic times for
the DAX30. The 7 o’clock price of the 05
DAX is a key pivot point to evaluate the
sentiments of the other market
participants. 12:00-14:00
Avoid trading between 12:00-14:00 as
04 traders at the exchanges take lunch
and the volumes fall, while volatility
takes a grip
15 MINUTES
Be extra careful in the first 15 minutes 03
of trading- preferably don’t trade

BEST TIME TO TRADE

02 The best times for trading DAX are 8 to
10 GMT and 14:30-16:00 GMT.

TUE, WED, THU

Tuesday, Wednesday and Thursday are
decent days to trade, unless there is a 01
statement from the FED or a major
earnings data from an important
company. Wait for at least 15 minutes
after the release to trade
CFDs
Pros
VS FUTURES

CFDs FUTURES

Pros Pros
!Easy to trade
!Cheaper to trade
!Smaller

!Some
initial deposit
index CFDs are quoted 24h
VS !Transparency

!Accurate Technical
!Better protection against overnight moves
!24/7 Support Analysis
!Use of Order Flow
Weaknesses of Futures for
Daytrading and Scalping

• The bid and the ask no longer touch each other as before, and if
you want to “enter” 20 lots for example, you will have 4 lots at
11,101.5, 9 lots at 11,102 and 7 lots at 11,102.5 on the Dax
futures which is the most liquid in Europe! With 20 lots on the Cac
40 FCE, you currently “knock off” the order book, which was
BID/ASK unthinkable 10 years ago.
• People who say that FCE futures are liquid, as I sometimes read,
have not seen an FCE futures order book for the past 10 years …
This example is similar to the Dow Jones 30 (YM) futures which
LIQUIDITY constantly has 2 to 3 points gaps which is still very low.
• This has immediate consequences on our trading results: a
portion of the sale or purchase orders are not (no longer)
executed or partially executed on futures even if the price is
affected. On American futures, with the algorithmic game and
ORDER BOOKS priority orders with CME licenses, professionals pass before us in
the futures order book, the “game” is distorted, we are served
only at the end of the order books … even when we anticipate
well in advance … Do not mince words on American futures, the
odds are stacked against us…
More weaknesses of Futures for
Daytrading and Scalping

•Since the futures lot sizes cannot be “adjusted”, we can only enter
or exit lots in sizes of 1, it is rigid; we cannot for example enter a
profit or a loss partially on a lot by clearing 0.25 of the position and
leaving 0.75 there as it is.
Lot Sizes
•The costs are now often higher than on CFDs : by entering the
order book or preparing limit orders, commissions + gaps to fill
which are often higher than the CDFs spreads + the tick size
which is higher on futures …
•For example, by entering the order books on the Dow Jones
Costs futures, I will pay between 2 to 3 points gaps + lead/return
commissions + the tick size of 1 point. On CFDs, all inclusive, I
have a fixed spread of 1.8 on the Dow Jones with a tick size of 0.1
… almost twice cheaper. On the Dax, I pay a 1 point spread on
fixed lead/return commissions on CFDs with a tick size of 0.1
while on futures I have a 1 point spread on average + lead/return
Order Books commissions + a tick size of 0.5 …
•Order books are empty on futures a few minutes before an
announcement. Spreads are not fixed and they can soar. It is not
possible to enter or exit, you just have to wait (and sometimes
pray) … here again we are confronted with the problem of liquidity
… After 6:00 pm … one wonders whether there is still a futures
trader alive…
 CFDs STRENGTHS
For scalping and daytrading
Absolute Liquidity

Compared to futures, CFDs offer ABSOLUTE liquidity; the price just needs to be
affected for you to be executed, irrespective of the number of lots. It is
absolutely revolutionary for scalpers or day traders. We no longer have partially
executed orders, no more problems of orders piling in an order book. affected
for you to be executed, irrespective of the number of lots. It is absolutely
revolutionary for scalpers or day traders. We no longer have partially executed
orders, no more problems of orders piling in an order book. affected for you to
be executed, irrespective of the number of lots. It is absolutely revolutionary
for scalpers or day traders. We no longer have partially executed orders, no
more problems of orders piling in an order book.

Liquidity Guarantee
CFDs have phased out order-books, the CFDs broker
guarantees liquidity and this is his problem and no
longer ours. In the past, 5 to 20% of my futures
scalping trades were not being traded or were
partially executed whereas the prices were affected, ABOUT CHART
but now 100% of my orders are perfectly executed… CFD Strengths
What makes CFDs better than Futures
Spreads
The consequence is that I no longer hesitate in taking a
trade depending on the time. I know that I can exit when I
want with a spread that will not soar before an
announcement…In fact, some CFDs brokers guarantee the
spread; and here we talk of guaranteed spread. This
means that even before or after an announcement, the
spread remains at 1 while on futures it moves from 1 to 5
 CFD Trading Example
Emphasising more strengths
Partial Fill
If Dax 30 has a fixed spread of 1 on
CFDs which means that your 20 lots,
your XX lots will all be executed at
8378.5. No more worries about order-
02
books, position in order-books, partially
executed orders, slippage or orders
Lot Size
The lot sizes can be adjusted on
CFDs; you can buy 1.17 lot,
04
partially resell 0.45 lot if you
wish. We can adjust the size as
we wish, to about 0.01….
Tick Size
The tick size, which is a disguised
spread, is 0.5 on Dax 30 and Cac 40 for
example on futures. On CFDs, it is 0.1 for
01 certain brokers. You can buy or sell in
the “futures spreads”. On futures, to
enter or exit, it will either be at 9000 or
9000.50. On CFDs you can enter or exit
at 9000 9000.1 9000.2 9000.3 9000.4
9000.5… It always takes less fees. To
earn money or exit flat, the price should
not shift by 0.5 like on futures, 0.1 is
enou h.
03
Other
There are other benefits, like larger
time slots compared to those on
futures, the possibility to be more
aggressive… but this would take a long
time to develop.
 Why do Scalpers and Futures
Day Traders not Trade CFDs
General Known Information

Old Habits Safe Brokers

Old habits and the lack of desire The danger of doing business
to change to a new tradable with an untrustworthy broker is
product are two of the major too high for some of the futures
reasons for that. traders. The last example came
after the Bank of Switzerland
surprised the markets and found
a lot of CFD brokers unprepared
for the losses.

The General Perception Order Flow

The general perception is that A lot of day traders and scalpers
CFD brokers are scammers. prefer using futures, because of
There have been a lot of cases the ability to use order flow- one
that have affirmed that of the most sophisticated and
statement. accurate ways to trade the
market profitably.
“ How else are you going to become a
profitable trader, if you don’t learn by

”
a profitable trader.

COLIBRI TRADER

www.colibritrader.com/trading-course

USE THIS VOUCHER

AND GET 10%
DISCOUNT OF
THE TRADING
COURSE The Price Action Method

“10 TRADERS” The Way Hedge Funds and Prop Trading Houses Trade
 Real Life Examples
The Best Way To Learn Trading Is To Trade Like The Professionals 79%
67%
47% 53%
28% 30%
15%

2008 2009 2010 2011 2012 2013 2014

In the slides to come, I am going to show a few intraday charts (15 Minutes) of DAX. All
of the encircled areas represent bullish/bearish rejections- or good entry/exit points*.

*FOR MORE ON FINDING GOOD ENTRY/EXIT MARKET POINTS REFER TO COLIBRI TRADER’S TRADING COURSE
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 Why do Scalpers and Daytraders Not
Massively Transition to CFDs
The Trader’s Edge
Changing Environment
Due to lack of information and curiosity,
and as a result of comfort and habits… the
idea that Futures are superior to
everything is now old fashioned….
Meanwhile, CFDs have entered the market
and have started changing it and its
habits. In the beginning CFD brokers got
bad reviews in the UK, which explains the
CFD Brokers delay in perception. UK brokers tried to
preserve their margin by casting doubts on
There are about 3 CFD brokers who call the quality of newcomers but the CFD
the shots in the market. They are brokers’ world is actually very large.
powerful and are often listed on the
stock exchange, monitored, audited,
and checked. Some are even worth
billions and they are regulated by FCA
with their accounts guaranteed,
segregated etc. One of these CFD
brokers is more powerful than the Paris
Stock Exchange as it makes transactions
of 4 to 5 billion Euros a day whereas the
Paris Stock Exchange finds it difficult to
go above 3 billion per day…There are
also non regulated CFDs brokers, in tax
havens who are more dangerous than
brokers. Serious CFDs brokers suffer
CFD Brokers
One Step Ahead
Choice of Broker
The choice of a CFDs broker
is crucial; all of them do not
offer the same range of
services and protection. You
should be careful and well-
informed. You should thus
C F
choose a broker with the FCA
label. We are already sure we
have a seri ous broker,
regulated by competent
people. Avoid Cypriot brokers
regulated by the Cysec.
Daytraders
D S
Whatever the case, there is a
market change that many
futures or shares traders
hardly see. You just need to
look at the volumes
exchanged on the DAX future
(FDAX) for the last 10 years to
understand that things have
changed dramatically…and
observe that the share
exchanges of alternative
platforms are soaring…
Fixed Spread
Not all CFD brokers provide
the same types of services;
for example my CFD broker
offers fixed and guaranteed
spreads with a spread of 0.9
on Dax 30, which I mostly
trade… This means that if the
market panics, the spread
remains at 1. Some other
very serious CFD brokers also
propose a spread of 1 on Dax
or Dow but it is not
guaranteed, so in case a
situation arises, it can move
to 2.5, 10… this is what
makes the whole difference
between a spread of 1 and a
guaranteed spread of 1.
Scalpers
For scalpers that are looking
for a suitable market to
trade, DAX offers some of
the tightest spreads along
with the EUR/USD.
 What does a futures or CFDs trader want ?
Last Words
Trader’s Status
I discussed this with my
colleagues at the Prop Desk
on futures. They are
sometimes skeptical of the
“futures trader status” which
is more valorised in the
collective psyche, but those
who try it often shift very
quickly from futures to CFDs.
Less Fees
A trader wants to pay less fees,
have absolute liquidity, have no
slippage, have the guarantee
that the prices will remain
tradable, be sure of entering or
exiting the market when he
wants with as many lots as he
want, be able to choose the lot
sizes, have guarantees on his
accounts in case of bankruptcy…
FCA regulated CFDs brokers do
INSTEAD OF CONCLUSION
The Little E-book of DAX

To conclude, I believe it would be better if scalpers and day traders transition

from futures to CFDs, to at least have the curiosity to try it. The certainty to
be served and to exit when one wants, to no longer have partially executed
orders, to no longer be overtaken in order books by algorithms, to have a
guaranteed and fixed spread which enables rapid entry and exit irrespective
of the announcement of the period or the day, have full and guaranteed
liquidity… and in addition, after a practical analysis, pay less for their entries
and exits than on futures… would revolutionise your trading, earnings and
material life… Be curious, choose a good CFD broker and give it a try…Trading
DAX CFDs could be a great solution for you if only you have the courage to
try…
“ How else are you going to become a
profitable trader, if you don’t learn by

”
a profitable trader.

COLIBRI TRADER

USE THIS VOUCHER

AND GET 10%
DISCOUNT OF
THE TRADING COURSE The Price Action Method
The Way Hedge Funds and Prop Trading Houses Trade
“10 TRADERS”
 ABOUT THE AUTHOR
COLIBRI TRADER

Colibri Trader is a professional trader. Among his accomplishments

are winning the KBC Stock Market challenge- where he ranked first
among over 800 professional traders. Currently, he is working in one
of the leading London Prop Trading Houses trading mainly DAX*.

TRADING VISION
Trading is not a precise science- it is a form of art
The trading style of Colibri Trader is defined as a form of Price Action that
uses a special scaling-in technique. Some of the most important factors
in this system are showing how to cut losses fast and let winners run for
as long as possible. Colibri Trader proudly shows how risk:reward rations
as 1:30 and above are possible. Ask for the Price Action Method for more
information. Visit www.colibritrader.com for more information

MISSION
My mission is to help traders become consistent with my experience

The Price Action Method is Colibri Trader’s trading course in which

he shows his trading strategy step-by-step. He honestly shows how
he trades on a daily basis without hiding anything- even his LIVE
ACCOUNT trading performance. The only mission Colibri Trader has
is to help traders achieve their goals as he is doing day after day.