The short term daily candle chart below shows the price history of the Germany30 contract for difference (CFD) which last traded around 10715.00 around time of publication as the underlying index ended the session lower this Tuesday in Germany.
This CFD aims to track the underlying Deutscher Aktien Index (DAX) and was last reviewed in in Ideas You Can Trade at the beginning of last month when the trend was turning bearish. Since then lower-lows followed characterized by lower-highs and a bearish channel emerged (see red lines on chart below).
Today support was lost on 10800.00 a level that had acted as a double bottom on June 16th and 18th and again yesterday. Unless that support level is regained the index should make lower-lows as the trend turns more bearish.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 11000.00 with a Limit to take profit @ 11200.00 and a stop-loss @ 10800.00 Risk/Reward Summary: Limit risk = +200.00 points profit / (-200.00) Stop-loss risk = Gain to Loss ratio = 1.00
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 10650.00 with a Limit to take profit @ 10489.00 and a stop-loss @ 10801.00 Risk/Reward Summary: Limit risk = +161.00 points profit / (-151.00) Stop-loss risk = Gain to Loss Ratio = 1.06
Medium Term Daily Candle Chart (zoomed-in):