If you like the idea of a fast-moving market with plenty of volatility, then you will love trading the DAX index CFD, also referred to as the Germany 30 index.
Germany’s Dax index is very similar to the Dow Jones Index, in that it tracks the movement of 30 of the largest stocks on the relative exchange. In this case, the Dax index consists of the 30 major German companies trading on the Frankfurt Stock Exchange.
You will be familiar with the line-up of companies included in the Dax Index, such as:
- Deutsche Bank
- Volkswagen Group
Volatility of the Dax Index
If there is one thing the Germany 30 index is renowned for, it is volatility.
You can see from the chart below around September 2015; the index was moving an incredible amount daily. It has since normalised the wild price volatility, but nonetheless, the Germany 30 index is not for the faint-hearted.
Perfect for Australian traders working a 9-5 job
One of the key aspects to the Germany 30 index is active trading times. The index is most active between 5pm-7pm AEST (depending on daylight savings) and is, therefore, perfect for those with a 9-5 job.
Traders based in Australia can finish their day job, run their analysis and then prepare themselves for the open of the market. Similar to the Aussie 200 index CFD, the best time to trade it is within the first hour of trade from the open.
For many day traders, the Dax index is their favourite for this very reason. They can work their standard job, then actively look for trading opportunities on the Dax and be done by 8pm.
Why trade the Dax Index CFD?
Many traders make the transition from trading direct share CFDs to indices. The reason for this is it is much easier to focus on one or two indices, rather than scan through several hundred stocks on a daily basis.
The Index CFD is the weighted average of the top stocks that comprise the index. So if you have a good handle on the largest 30 companies in Germany, then making the transition to trading the Germany 30 index will be seamless.
For those who aren’t familiar with every stock in the index, technical analysis will allow you to trade based on key technical levels including support/resistance and overbought and oversold levels.
Key fundamental data to watch when trading the Dax Index
It is handy to keep an eye on the following data points:
- Elections and European referendums
- European Central Bank (ECB) meetings
- Employment, inflation and reporting season for the stocks
Trading the Dax Index with TradeDirect365
You can trade the Dax via the Germany 30 index on the TradeDirect365 platform. The margin required to trade the Germany 30 index CFD on our platform is just 1.25%.
Because of the low margin and commission free trading, the German 30 index CFD is one of our most actively traded indices.
Considerations when trading the Dax 30 Index CFD
When trading the Germany 30 Index CFD, there is an overnight financing cost. This means your account will be debited every day you hold the position past the New York close.
You will also need to consider any dividends which may be paid on the stocks within the index.
If one of the stocks on the Frankfurt Stock Exchange top 30 pays a dividend, then you will receive a credit if you are long the index. If you are short, then you will be debited at a pro rata rate. Any debits and credits are clearly highlighted within your activity history tab within the TradeDirect365 platform.
Germany 30 Index CFD Specifications
- Trading hours: 00:00 – 21:00
- Fixed spread during hours: 1
- Out of hours spread: 6
- Expiry date: None
- Contract months: Rolling
- Margin required: 1.25%
Charting the Germany 30 Index CFD
If you are a technical chartist, then you will love the charting options available on the TradeDirect365 trading platform.
To view the chart, you will notice a chart icon beside each instrument. Click on that to open the chart.
An example chart of the Germany 30 Index is shown below. Here you can see a candlestick chart with the slow stochastic index at the bottom of the chart. You will notice up the top left it is a daily chart.