What to trade in Europe?

Discussion in 'Trading' started by Laissez Faire, May 31, 2012.

  1. Hello everyone,

    I am a fairly experienced trader of the ES contract and although I have a deep love for this market, working on US hours is starting to wear me down, so I`m looking to possibly switch to an European market.

    Do indexes typically trade the same way? My experience is solely with the ES and I`m amazed at how technical this market is and how predictable it is at times. Anything similar in Europe?

    I`ve been doing a fair amount of back testing in crude oil and learning how this market moves, but I don`t find it have the same respect for levels and turning points like I find in ES.

    So, what is everyone trading in Europe?

    I think I will be looking into the Eurostoxx index and German debt.

    The DAX seems to be fairly thin at times and I`ve heard the moves can be quite violent at times.

    Obviously, I need to do my own research, but if anyone got any pointers, I`m happy to hear it.

    Thanks in advance. :)

    Laissez Faire
  2. Handle123


    Really comes down to your style of trade, if you are a true scalper, nothing better than Euro Schatz, if more into trend trading Euro Bund then the Bobl for financial and DJ Stoxx for indexes, try not to trade the Dax at all cause of regular slippage.
  3. DAX is a beast, PA in not nearly as clean as in the ES plus you lose the 24-hr market ... DAX closes's nightly for 8-hrs... becomes gap happy which equates to much greater risk exposure for overnight holds

    FESX is a bit more docile, but same session issues...

    CL is also a beast. Again, not nearly as clean to what you are accustomed to in the way of PA, very geopolitical sensitive, but can be traded, just need to adapt.

    2nd best instrument to ES imho would be eur.usd "forex" it is cleaner, but still not as nice as ES and lacks volume signals.... exhaustion, etc....

    All markets can be traded, but if you are searching for an instrument comparable to your ES experience, you may find yourself disappointed

    I live in Europe and adapted to eur.usd, CL [at key levels], US pre-market @ volatility events, Earnings when in season, focus my time on the US AM session to initiate / PM session to manage... I never found a european instrument as a substitute I felt as comfortable with...

    but to each is own, just need to find your niche... and adapt...

    trade well,

    PS: agree with Handle123, he provided good options, and excellent point about slippage... ton's [also CL slips hard during AH's and on the lower volume contracts]
  4. Humpy


    If you are into stocks then consider the banks. Especially those that the Govt will bail out . The Spanish banks are very cheap right now.

    But there are rumblings about nationalizing the banks though. Teach the bums a lesson after all the bonus fuss ?

    Also bear in mind the EU is in really bad trouble financially and the 2nd rate leadership are pouring money into the black hole with no visible good results.

    The truth is that europe compared to the bric countries is uncompetitive and it won't do much good however much money the clots in Brussels print, Mugabe style.
  5. Thank you, Handle.

    I will look into those.

    I`m looking for something that behaves well and have ample liquidity. From my superficial research, I do not think DAX is an option.

    I find that ES being a derivative of a cash stock market, gives me an edge, because I can use those hours to calculate levels that are respected, whereas in a true 24-hour market, those levels does not seem to apply in the same manner. I hope I will discover that the same applies to European indexes.


    Laissez Faire
  6. I appreciate your advice and what you are saying makes a lot of sense.

    I will still continue my studies of CL as I find that it is very much tradeable and predictable at times, it`s just not as clean as ES and is fairly disrespectful of levels at times that in ES can be called almost to the tick in advance. Another obvious difference is that you don`t always get a "second chance" compared to ES which backfills a lot.

    Good trading, sir.


    Laissez Faire
  7. Unless you are trading huge size, there is plenty of liquidity in the Dax. Bid ask is tight as well. It is also a really big contract, so You wont need to trade as many contracts. The ES is really too small a contract, the S&P contract was perfect, CME scammers dont want to make that all electronic because then all the volume would go to the big contact. The ES just ends up generating more fees for the CME making it costlier to trade.
  8. mni4tw


    fdax or fesx from arround 9:00 - 13:00/14:00 (german time) and than i normally switch to the es/ym/tf/nq. in the morning it often moves like a leverage of the us-futures at that time and often overplays in one direction and comes back later when usa is becoming really active (arround 14:00, often newsevent 14:30)). normaly you have one or two good moves in that morning timeframe. after that all that matters is usa and i stick to usa then because they move more predictable and better(for example gap close).

    dont trade fdax or fesx after 17:30 (xetra close, german time), way too much manipulation.

    you should watch fdax/fesx some time before starting to trade them to see how they behave in the morning (always watch es and eur/usd(6e or forex) at that times too). depending on your normal "risk" you should start with the fesx because it is a little contract for beginners to get a feeling and you wont get hit that hard compared to the fdax(or use weekly options on the dax (odax) with 5€ per point).

    if you like bonds or are used to watch one the fgbl (10y german) should be on your list.

    cant say if ftse(uk)/cac40(french)/ftsmib(italy) move like fdax or are "easier", but i guess it moves similar(im german and used to fdax/fesx for european market).