in Trade Ideas
The extreme volatility and low liquidity that we are experiencing in the markets makes the risk of trading financial instruments such as the DAX future riskier than normal. The Euro Stoxx 50 the replacement for the DAX until the coronavirus fever passes.
Euro Stoxx 50
It is the market or the index that includes the 50 companies of largest capitalization in the eurozone.
I have been trading this market for a few years but later switched to Dax because I like the range and volatility. Now, if we compare it with the Dax, euro stoxx It has less volatility and much more liquidity.
This market, before the crisis of the coronavirus and of the stock market crashes What we are having is a market that moves very little. For example, for those of us who want to scalp, it is a space where it goes very slowly because it has little range.
Today, with this volatility we have closely resembles Dax that we have previously therefore, I recommend Euro Stoxx 50 as a substitute for the Dax for this moment we are living.
10 times more liquidity than the DAX
10 times more contracts are executed than on the DAX. What is the good thing about having more liquidity? Our future contracts are going to be executed where we want and we are not going to have a problem since having less volatility it is more difficult for us to miss a wider stop than we want.
In addition, other advantages that we have is that the guarantees that they usually ask us for are smaller. For those of you who work with Ninja Trader for the Euro Stoxx they ask you for $1,000. For those of you who work with Esfera Capital or Visual Chart, it’s 600E to operate with Euro Stoxx, that is, they ask for far fewer guarantees.
Euro Stoxx 50 the substitute for the DAX for now until the volatility subsides. It is 10 euros a point.
You try trading system and convince yourself because I am sure that if not, there will be many days that we will be able to operate in the market.
They can stop the market with any volume, which is true, that if we identify a certain pattern in the market and we see that there is a certain volume that generates certain circumstances in a significant percentage of the cases, then we can work with that idea.
You already know that for the DAX the chart in minutes is at 500 contracts and currently, in Euro Stoxx if you want to use the idea of relevant volume, it is around 10,000 contracts on 1 minute charts.
doHow do we know if there is relevant volume in one market or another? Simply start looking at a history, you go to 1-minute charts and see when there is a trend, what volumes usually appear and in that range you manage.
Remember that the important thing is that you are able to control the risk of loss. And this market today allows it, therefore, you know, as long as there is a Euro Stoxx coronavirus. If you still do not have a profitable system to operate, join the Free Basic Trading Course and lays the foundations for profitable stock trading.