GER40 LONG Below is a high-level, multi-timeframe trading plan for GER40 (DAX) that synthesizes the Weekly, Daily, and 4-Hour analyses you provided. As always, manage risk carefully, adapt to changing market conditions, and remember that no setup is guaranteed. This is a technical overview for educational purposes and not financial advice.
1. Overall Market Context
Weekly Bias:
• Trend: Bullish structure with higher highs (HH) and higher lows (HL).
• Support/Resistance:
• Support near 19,750 (0.618 Fib extension)
• Resistance near 20,500 (recent HH)
• Indicators:
• SMAs (10, 50, 100, 200) all sloping up.
• Ichimoku Cloud is bullish, OBV rising, RSI ~60 (positive), ADX is low (trend not very strong but still bullish).
Daily Bias:
• Trend: Overall bullish, but short-term pullback has price near support.
• Key Levels:
• 19700–19650 is a confluence zone (50 SMA, Ichimoku Base Line, 0.5 Fib).
• 20500 is major resistance (recent swing high).
• Indicators:
• Price above 100 & 200 SMAs (long-term uptrend intact).
• Price below 10 SMA and Ichimoku Conversion Line (short-term bearish tilt).
• RSI ~49 (neutral), MFI ~50 (neutral), ADX ~20 (weak trend).
4H Bias:
• Trend: Range/consolidation after fall from 20500.
• Price Position:
• Below 10, 50, 100 SMAs, but finding support near 200 SMA (~19750).
• Ichimoku Cloud signals short-term bearishness (price below the cloud).
• Indicators:
• OBV still positive relative to previous HL (buyers holding but not aggressively adding).
• CMF slightly positive (~0.10), MFI ~32 (nearing oversold), RSI ~45.
• ADX ~22 (weak momentum), with -DI > +DI (mild short-term bearish pressure).
Takeaway:
• The long-term trend (Weekly, Daily) remains bullish.
• A short-term pullback is unfolding (Daily, 4H).
• We want to align with the bigger uptrend but confirm a short-term reversal signal before entering.
2. Actionable Trading Setup
A. Preferred Direction: Long/Bullish
Given the weekly and daily uptrend, the ideal plan is to buy the dip once the short-term down move shows signs of exhaustion or reversal.
B. Entry Triggers
1. Aggressive Early Entry
• Zone: Around 19,700–19,650 (Daily 50 SMA / 0.5 Fib / Ichimoku Base Line).
• Trigger Condition: A 4H bullish reversal candle (e.g., bullish engulfing, pin bar with strong rejection) or a clear break back above the 4H Ichimoku Conversion Line along with rising RSI > 50 on the 4H.
• Why Aggressive? Price is still below short-term SMAs on the 4H and below the Ichimoku cloud. You’re buying on expected support without waiting for a full breakout.
2. Conservative Breakout Entry
• Zone: Above 19,900–19,950 to reclaim the 10 SMA on the Daily and the 4H Ichimoku cloud.
• Trigger Condition: A Daily close above the 10 SMA and/or the Ichimoku Conversion Line on the Daily. This signals the short-term pullback is likely over.
• Why Conservative? Waiting for price to show proven strength, reducing false-break risk.
C. Stop Loss Placement
• Stop Loss (SL) for Aggressive Entry:
• Just below 19,600 (below the 50 SMA & 0.5 Fib).
• This levels out to a potential 100–150 point risk, depending on the precise entry.
• Stop Loss (SL) for Conservative Entry:
• Below the recent swing low (around 19,650). If the market truly regains the 10 SMA and Ichimoku levels, it shouldn’t return below that swing low if bullish momentum is resuming.
• This is a wider SL, but the setup is more confirmed.
D. Profit Targets (TP)
1. First TP:
• 20,500 (the recent swing high).
• If price approaches that level, consider locking in partial profits or moving the SL to breakeven.
2. Second TP (Optional Extension):
• 20,800–21,000 (a psychological area / possible Fib extension above the previous HH).
• Watch for weekly chart extensions or Bollinger Band upper extremes if momentum accelerates.
3. Stretch Target:
• 21,250–21,500 based on a full extension from the Weekly Fibonacci or if the market picks up strong bullish momentum.
• Only feasible if the market cleanly breaks 20,500 and a bullish daily structure continues.
E. Trade Management & Timing
1. Partial Exits:
• If you’re trading multiple contracts, consider taking partial profit at 20,500 and letting the remainder ride with a trailing stop.
2. Break-Even Stop:
• Once price is comfortably above 20,100–20,200 and holding intraday retracements, move SL to entry to lock in profits and limit downside risk.
3. Monitoring Indicators:
• Keep an eye on the 4H Ichimoku Cloud and the Daily 10 SMA for signs of ongoing bullish momentum. If price fails to hold above these levels once reclaimed, it could signal a deeper pullback.
4. Time in Trade:
• Given the Weekly and Daily structure, this is not a scalp trade. It can take days to weeks. Let the market action confirm your bias.
F. Suggested Leverage & Risk Management
• Leverage:
• Use moderate leverage (e.g., 1:5 to 1:10) if comfortable with the inherent risk. The more leverage, the higher the stress on your account if price temporarily dips.
• Always size positions so that total risk (i.e., position size * SL distance) does not exceed your account’s acceptable drawdown (e.g., 1–2% of total capital per trade).
• Risk/Reward Target:
• Aim for at least 1:2 or 1:3 R:R. For example, risking ~100–150 points to potentially gain 300+.
3. Putting It All Together
1. Wait for Support Confirmation:
• On the 4H, watch for a bullish candle near 19,700–19,650 (Aggressive) or a break above 19,900–19,950 (Conservative).
2. Enter Long Position:
• Execute the buy on the confirmed signal.
• Place SL below the identified support (19,600 or 19,650).
3. Manage the Trade Dynamically:
• Move SL to breakeven at the first sign of decent profit (~20,100+).
• Take partial TP at 20,500.
• Let the remainder ride toward 20,800–21,000 if momentum persists.
4. Stay Aligned with the Bigger Picture:
• Weekly and Daily remain bullish; short-term dips can be noise in a bull market.
• Maintain discipline if price fails to reclaim key SMAs or Ichimoku levels (exit if breakdown accelerates below 19,600).
4. Final Notes
• News & Fundamentals: While this setup is technical, be aware of any macro events (ECB, Fed, major economic releases) that can cause volatility spikes on indices like the DAX (GER40).
• Adapt if Key Levels Break:
• If price fails to hold 19,600 and closes multiple days below it, the bullish scenario may be invalidated short term. Look for deeper support in the 19,300–19,000 zone.
• Emotional Control: Trading pullbacks within an uptrend requires patience to avoid jumping in too early. Confirmation signals reduce the chance of whipsaw.
Conclusion:
• Primary Strategy: Long (buy the dip) aligned with the Weekly and Daily uptrend.
• Entry Zones: Around 19,700–19,650 (aggressive) or above 19,900–19,950 (conservative).
• Stops & Targets: SL below 19,600; TP1 ~20,500, TP2 ~20,800–21,000.
• Leverage: Keep it moderate (1:5 to 1:10).
• Indicator Cues: Watch SMAs, Ichimoku lines, RSI, and OBV for confirmation of a renewed bullish push.
Trade safe, manage your risk, and watch for momentum returning on lower timeframes to confirm the Weekly/Daily bullish bias!
