Trading The DAX30 With The Open Range Breakout - Wednesday, Jan. 16

After scepticism from market participants at the start of 2019, and the high volatility between Christmas and New Year's Eve, bulls finally caught some backwind and went for a re-test of the region around 11,000 points.

(Click on image to enlarge)

Source: Admiral Markets MT5 with MT5SE Add-on DAX30 CFD daily chart (between 29 September 2017 to 11 January 2019). Accessed: 11 January 2019 at 10:00 PM GMT

Please note: Past performance is not a reliable indicator of future results, or future performance.

The fact that the DAX30 CFD bulls are gaining more and more control could already be seen one day earlier, on Thursday. After Apple cut its revenue outlook for the first time in almost two decades, the DAX30 CFD initially failed to break above 10,660/680 points. However, it also didn't break below 10,400 points.

On Friday, bulls finally found enough confidence to push the DAX30 CFD higher once the news hit the wire that China would cut its reserve requirement ratio by 1%. Later, strong NFPs and comments from FED chairman Jay Powell triggered further strength, resulting in a close of more than 3% higher for the day.

As you can imagine, it was possible to be positioned in this stint on the upside on January 4.

But before we go into further details, let's recall the three steps of the DAX30 CFD open range breakout strategy:

  1. Define open range between 8:00 am and 9:05 am (CET)
  2. Identify the advantage: based on the 5-min-EMA (50)
    • DAX30 CFD trades above → Long
    • DAX30 CFD trades below → Short
  3. Trade the break of the open range in direction of the identified advantage
    • Stop: Above/below the high/low of the range (= 1R)
    • Take profit: 2R away from the entry point of the trade

In the following paragraphs we will go through these three steps and see how the setup would have performed on January 4, 2019.

1. The high and low between 08:00 am and 09:05 am (CET) can be found between 10,507 and 10,550 points, so the open range is 43 points wide.

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Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") ...

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