DAX (Germany 30) Trading Analysis

by: Colibri Trader

 

Dear traders,

I did analyse the USDCAD in my last article. The pair initially showed quite a bullish behaviour, but after a while, there was a bearish pattern on the 4H chart, which gave sellers a reason to short USDCAD.

DAX (Germany 30) Trading Analysis

As you can see from the 4 hour screenshot, there was a rejection of the minor resistance area. Secondly, there was a two bearish engulfing pattern, which led to more selling pressure.

I was stopped out on a long position I took that day. All in all, it was a very mixed session and led to some losses for me. The great thing is that I followed my trading plan and did not break my own rules.

Always follow your plan, even more so when you are losing!

It would be unrealistic to trade and not have losses. The important thing is to preserve your capital and minimise the losses. Again- think about the next 1,000 trades.

One winning or losing trade should be just a drop in your “trading river”.

 

DAX (Germany 30) Trading Analysis

 

Today, I am looking at the German stock market- DAX. I wrote about it on Twitter HERE and I was expecting to either see a break or a reversal. It seems like the former is the case.

DAX formed a bearish engulfing pattern on the daily chart.

There is a major resistance level that it could not break at 13,500.

Right now, I am looking at the most imminent minor support level at 13,400. If we see price dropping and closing below this level on the daily chart, a lot of market participants will rush in push the price lower.

I will be watching for a retracement tomorrow and if the right price action setup occurs, I might go short.

For now, it is risky to go against the trend, because we are still in a major uptrend.

That is why, I prefer to continue monitoring DAX and if all boxes are ticked, I will take action.

 

Happy Trading,

Colibri Trader

 

p.s.

Check out my recent short essay on Leaking Faucets and Trading. Sometimes, the best trading knowledge comes when you don’t take a trade, but reflect on the trading process.

Patience, patience, patience!