DAX 30 Signals

by | Jun 10, 2020 | Uncategorized | 0 comments

Welcome to the DAX 30 Signals review article! But first, you need to know, what is DAX30?

The DAX stock index records the value of the 30 largest and most liquid companies listed on the Frankfurt Stock Exchange (FSE), the largest stock market in Germany and the twelfth globally.  DAX, the benchmark index of the german stock market, is one of the most traded derivatives in the world and a favorite of investors as a hedging strategy for exposure in the stock market.

DAX comes from the acronym Deutscher Aktionindex and was created in 1988, as a base year, with a value of 1000 points.  Among some of the companies that we can highlight that make up the index, we have BMW, Adidas, Bayer, Allianz, etc.

The prices it uses are channeled through an electronic commerce system called XETRA.  DAX30 updates prices differently than most indexes, as they are updated with the futures prices for the next day.  The sessions are held from Monday to Friday from 09:00 until the closing auction that begins at 17:30.

DAX is one of the best indexes to look for solid long-term investment companies with good dividends.

The companies that make up the DAX30 are considered blue chips.  A blue chip is a company that has a national reputation for superior quality, reliability and the ability to remain profitable in both good and bad economic conditions.

In the DAX30 basket we can find all kinds of values: from the industrial to the chemical-pharmaceutical sector, from telecommunications to clothing. The variety is important considering it only shows the 30 best values.

In order to be part of the DAX, companies must meet some basic requirements:

  • Have been listed for at least three years
  • At least 10% of your titles must be publicly traded
  • They must be listed on the “Prime Standard” segment of the Frankfurt Stock Exchange
  • They must be representative for the German economy (generating sufficient profits or having the headquarters in Germany)

dax30 signals

Who is Behind DAX30?

Although we may believe that the normal thing is that the DAX index was born from the hand of a renowned German economist, it was not.  This stock index was designed by Frank Mella, a publisher of the Börsen-Zeltung who was entrusted by his chief editor with the task of creating a German stock index with the most important companies in Germany.

The result of this work pleased his superiors so much that they showed it to a group of expert bankers.  These in turn also appreciated the value of Mella’s work, and collaborated in the birth of the German index, DAX30.

How to Trade Using DAX30?

As with any other financial index, DAX cannot be bought and sold like a stock. Instead, we will have to trade on it through derivatives such as futures or CFDs.  The main DAX futures market is Eurex, which offers trading in DAX futures from 08:00 to 22:00.

In addition, you can access the index market through derivative products with which you can go long or short term on the DAX, depending on whether you think its value will go up or down and using financial leverage.

 Factors that Move the DAX

The evolution of the DAX30 is not very different from the behavior of other indexes and markets.  In this sense, it reacts to a series of factors including macro events and other variables such as changes related to the component companies and the industries themselves.

In terms of the price of its components, the evolution of the price of a share will have a greater or lesser impact depending on its weight in the index.  A 5% movement in the DAX’s heavier weight will have a more significant impact compared to a similar change in one of the lighter components.

Other significant factors for the value of the index include global trade conflicts, changes in bilateral trade relations, for example following Brexit, as well as global crises that may have international repercussions for an entire industry.

 How the DAX Value is Calculated?

The DAX is a capitalization-weighted index, which means that companies with larger capitalization will have more influence on their price.  And it is calculated according to the floating capital methodology, so it only takes into account the number of freely available shares, ignoring those that cannot be effectively bought or sold (such as shares held by governments or other institutions).

The maximum weight that each company can have in the DAX is limited to 10%.  Prices are taken from the Xetra trading platform, which handles 90% of FSE trading, and are calculated every second.

 Pros of DAX30

Here are some of the advantages of operating with DAX30:

  • No fees apply when taking positions on the DAX 30
  • Reduced initial capital.  This allows you to take a low initial risk and increase the position depending on the market and risk appetite of each trader.
  • The spread (Ask – Bid) is 0.8 bps.
  • The leverage level for professionals of 1: 500 and for retailers of 1:20.

Summary DAX 30 Signals

We did a thorough research and tried a signal service for DAX30 ourselves which is so far the best we’ve tested.  Practical, efficient and easy to use, especially if you are a beginner or you cannot dedicate yourself full time to trading.  Don’t worry, we have the perfect tool for you.

Germany is the largest economy in the European Union and the fourth largest in the world.  German publicly traded companies play a very important role in bringing their relevant positions to their country.  Now that you know what you need regarding the DAX30 and you have the right tool to obtain signals that facilitate your experience, you can invest in the European market without worries.

Remember that to be the greatest trader you need to have the best supplies and web equipment, don´t hesitate about searching a little bit more about DAX 30 in case you are interested.

Good luck on your way to trade!

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