How to trade the DAX

You’ll trade on the DAX using CFDs. CFDs are financial derivatives, meaning that you won’t own any underlying assets, such as stocks in a DAX-listed company. Instead, you’ll speculate on the underlying asset’s price movements – in this case, either fluctuations in the DAX index itself, or movements in the prices of DAX companies’ shares or ETFs.

Financial derivatives are leveraged. This means that you won’t pay the entire value of your position upfront (as you would when buying shares, for example), but you’ll pay an initial deposit called margin to open your trade. Because both profits and losses of leveraged trades are calculated based on the full position size, rather than your deposit amount, you can earn or lose far more than the price you paid to place the trade.

Trade the DAX (the Germany 40 on our platform)

• Speculate on the performance of Germany’s largest companies – some of the most popular in Europe – from a single position
• Take a position on the index’s price using CFDs – although this is a derivative trading product, this is the most direct, and only way, to trade the DAX with us
• Gain exposure to the DAX in a market with high liquidity
• Enjoy the freedom to go ‘long’ (if you think the price will rise) or ‘short’ (if you think the price will fall)
• Trade commission-free with CFDs (excluding share CFDs) as charges are included in the spread
• Use our Germany 40 ‘cash’ (spot) market to take a position in the short term
• Or choose our Germany 40 futures or options markets for the longer term
• Trade around the clock, almost 24/7 (excluding 6am to 4pm on Saturday and 6.40am to 7am on Monday UTC+8)

Trade in DAX ETFs

• Gain broad exposure to the DAX index with ETFs
• Take a position on DAX ETF price movements with CFD trading without owning the underlying asset
• Use CFDs to go long or short – but remember that this offers lower liquidity and higher spreads than trading the index directly via CFDs
• Instead of speculating on the current index level of the DAX, you can choose to trade on the price of the ETF – calculated using the fund’s net asset value (NAV)

Trade DAX shares

• Target specific stocks included in the DAX, like Volkswagen, Allianz and Adidas, without trading the entire index
• Speculate on DAX stock price movements with CFDs without owning the underlying asset
• Go long if you’re feeling bullish, or short for a more bearish market, when trading the DAX via our Germany 40
• Share CFDs attract a minimum commission of €10.

Open your DAX trading account

You can open a position on the DAX with us by opening a CFD trading account.

With a CFD trading account, you can enter and exit positions on the DAX (named the Germany 40 on our platforms) quickly in highly liquid markets.

Because CFDs are derivatives (meaning you don’t own the asset outright), you can speculate on both rising and falling prices by going ‘long’ or ‘short’.

CFDs also enable you to trade the DAX index more directly. This gives you exposure to the performance of the Germany’s top 40 stocks from a single position.

CFDs are leveraged, so you can open a trade by making an initial deposit worth a fraction of the total value, known as margin. However, it’s important to remember that profits or losses for your trading are calculated on the full position size, not your margin amount. So, losses could substantially outweigh this initial amount and it’s vital to take steps to manage your risk.

Take your first DAX trading position

Let’s take a more detailed look at the various ways you can open a position using CFDs.

A contract for difference (CFD) is an agreement to exchange the difference in price of an underlying asset, as measured from the time the contract is opened until the time it’s closed. So, however much the price of that asset has risen or dropped since you opened your position is what you stand to make as a profit or a loss, depending on whether your prediction is correct or incorrect.

For example, you believe that the DAX is set to rise from its current price of 16296.7. So, you buy a DAX CFD contract on our Germany 40 index worth €10 per point. Your forecast is correct, and you close your position when the market reaches a sell price of 16396.7. The difference is 100 points, multiplied by the €10 per point, so your profit is €1000 – excluding other costs.

If your prediction is incorrect and the market drops, and you closed your trade at a level of 16196.7, your loss would be €1000 – excluding other costs.

Learn what moves the DAX’s price

If you want to trade the DAX successfully, you’re going to need to be able to predict the DAX’s movements. This means understanding what influences its price, which will help you decide when to open and close your positions for the maximum chance of profit.

Among other factors, the DAX’s price is moved by:

• Earnings reports: changes to DAX constituents’ valuations and results, as well as significant positive or negative news released in their latest earnings report, can have a substantial impact on the index price, depending on the weight of the stock
• Economic events: for example, the index experience significant volatility throughout 2020 during the economic fallout of the Covid-19 pandemic
• News releases: just as with significant economic events, high profile news releases can be followed by a period of volatility in the market. If the news pertains to any of the industries or constituents of the DAX, its price may be especially affected
• Exchange rates: fluctuating exchange rates can affect the DAX’s price because its constituents, like BMW and Volkswagen for instance, earn a lot of their income in other countries

Remember, information from research is power. You should always use a combination of fundamental analysis and technical analysis before trading the DAX, follow a trading plan and a risk management strategy.

Hone your DAX trading strategy

A trading strategy is never perfect, nor is your knowledge of the DAX, so both will be an ongoing process of refining your craft. Here are a few tips to consider as you continue to develop your DAX trading strategy:

• Decide on a trading style: there are four main trading styles – scalping and day trading for more short term traders, swing trading and position trading for longer term. Your chosen trading style determines how often you place a trade and how long you keep them open
• Study charts and price action: daily and weekly charts can help you to gauge market sentiment, while price action can help you recognise patterns and get a feel for what the market might do next
• Use technical analysis and indicators: use technical analysis and trading indicators can help you identify certain signals and trends on the DAX
• Look for DAX trading signals: by analysing the DAX chart often and knowing its rhythms, you should be able to tell if it’s in a trend. You can confirm trading signals with momentum indicators such as the stochastic oscillator or relative strength index (RSI)
• Keep up to date with the news: every time news about a DAX-listed company (like earnings) is released, it can affect share prices. Keep a close eye on the economic calendar to help you trade according to the latest events
• Set trading alerts: no one can watch the markets all the time. Trading alerts let you to set specific criteria for the Germany 40 price and be notified immediately once those market conditions have occurred

What else you need to know about the DAX

The DAX is calculated by weighing all its 40 listed stocks by market capitalisation. This means that bigger companies with a higher market capitalisation, such as Bayer or Adidas or Volkswagen, will be weighted more ‘heavily’ than smaller companies and will have a larger effect on the index’s overall price.

Most of the DAX-listed companies’ individual stock prices are calculated automatically by Xetra, an electronic trading system that’ll determine that company’s weighting on the index.

What are the DAX’s trading hours?

The DAX index is open 24 hours a day except for 6am to 4pm on Saturday and 6.40am to 7am on Monday (UTC+8).

CFD German shares are open from 4pm - 12.30am weekdays (UTC+8).

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