Hi, I'm based in the UK and trade the Dax and occasional Eurostox usually first two and a half hours, news in US then from 3pm - 5pm UK time ie from 30 mins after US open. Very interested in you talking about "buy rumour sell news". I have been trading news reversals for a while in the Dax, but usually on US news only. I note the price pre news, then use that as the pivot. I tend to only enter if market holds for more than 5 mins after , for example , bullish news comes out. Eg Market trading 60, trades 80 on news, sell stop 59 but market needs to hold above 60 for 5 mins (more longs trapped ?). It was working well through the summer, but recently bullish news in uptrends have set up reversals, triggered my shorts and then shot higher on too many occasions. What is your experience with it ?
Bonds trend better than ES, so you are likely to have better returns if you focus on trends. Take a look at the bond charts to see what I mean. They move a bit differently, sometimes have short periods of virtually no move after which a strong move can ensue. ES usually do not do tricks like that.
Hi Electron, could you please explain something about the quotation of the ZB contract as well as how much is 1 tick worth? Currently I trade the ES, mainly with a 210 tick chart. I guess the ZB moves a bit slower, so what would be the equal time frame, or tick size for the ZB contract? Do you know a good site where to find a good overall explanation about the ZB future? Much thanks! Saico Germany
I've used that pattern before, however you sometimes get chopped up as the market trades back and forth, and gets out both longs at shorts. So you have to use a close stop IMO. Also it works best when expectations are *really* extreme, and/or the figure is a real surprise, rather than just using it on any old figure. The more moderate the expectations and/or the number that comes out, the more likely it is to create a whipsaw. In fact, one of my favourite news strategies is to fade the initial blip from a fairly moderate figure. My comment in the previous post was based more around the tick action - it is a while ago now, but IIRC there was a quick spike higher, then the rally rapidly fizzled and started trading down. I sold once the market started ticking lower after that quick fizzle - I didn't wait until it traded below the pre-news price. Basically on that kind of news the market rally should act strong, not go weak so quickly. So when it faded away, that was a warning. Eggs - yeah, I'm based in Europe and trade the stock indices on Eurex, although I've been trading more in the Bund & Bobl in recent months.
why would the margin requirements at IB be so much more higher for Dax as opposed to ES (twice as much)?
Because the DAX is worth twice as much. DAX: 3829 x 25 = 95,725 Euros per contract ES: 1066.50 x 50 = $53,325 per contract -Fast