1) I noticed that around 1:30 CET, the dax or all other european index futures start drifting sideways everyday and only starts to move about an hour b4 the US markets opens, I am wondering what 's event behind this rhythm..Is it lunch break in europe??? 2) If you have a winning postion b4 the US opens, would u take your profit b4 the market opens, I often notice trend-reversal immediately after the US opens, but It seems that the counter-move to the morning/afternoon trend starts b4 the US opens, when would you take profit (not considering other variable) from a "time" perspecitve.
1) Yes, it´s more or less lunch break (13:00 to 14:30 CET). Watch 14:30 CET when US economic data comes out and DAX will do some very quick move (together with ES, NQ, YM). Best method is to close positions before 14:30 CET. Quite often lots of stops will be triggered and quotes may be delayed at this time.
thanks..fx..that was very helpful.. one more thing, does it have something to do with the e-mini and the s&p open? (it opens at 8:30, right?, I am not sure, cause I trade foregin markets) . as your said, It gets real choppy around 14:30,definitely a "dead-zone" for trading, so when do you think it's ok to start trading again on the dax? My own observation is that around 16:30, it settles down and the trend is cleaner?
When do Europeans have lunch? In Luxemburg and in northern Europe between noon and 1 pm. In Italy and in southern Europe between 1 and 2 pm. This gives a cumulated "lunch effect" between noon and 2 pm. Also, suppose you have made a good trade in the afternoon, and closed it by 11 am or 11.30 am: would you go on trading or have a break? I'd have a coffee... Then, I'd wait until 2 pm (7 am in NYC) when the US markets starts waking up, before doing anything meaningful.
After 16:30 CET there is not much time left and the underlying stock market will close at 17:30 CET (effective Nov 03). Wait for Eurex to come to the US (Jan 02, 2004).
Do you feel it is easier to trade the Eurex before the US markets kick-off? Another observation is the Bund/bobl follow the ZN/ZB and the ESX/DAX follow the NQ/ES. But they could deviate from the US when they are closing.
carrying on.. if you only trade b4 14:30 CET, it's better to have a profit target or it's better to let the market take you out of the trade by a trailing stop? fx: mind telling me how is eurex us going to affect trading on the eurex. I thought it's more a threat to the e-mini's..
Could US-based traders answer my tax question? P/L from trading Eurex is not reported on 1099. Can it be treated in the same way as US exchange futures with the 60/40 rule applied? When you convert Euros into USD, do you use the exchange rate at year end of over the trading period. Thanks in advance.