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Richard Berry
- Updated
We have ranked, reviewed and compared FDAX trading platforms, costs, spreads, overnight financing rates and account types so you can choose the best trading platform for trading the DAX. The best DAX trading platforms that let you speculate on the German Dax 40 index (Deutscher Aktienindex), an equity index launched in 1988 that tracks the performance of 40 of Germany’s leading stocks.
❓Methodology:
We’ve chosen what we think are the best DAX trading platforms based on:
- Over 30,000 votes in our annual awards
- Our own experiences trading the DAX in the accounts with real money
- An in-depth comparison of the DAX trading features that make them stand out compared to alternatives.
- Interviews with the DAX trading platform CEOs and senior management
City Index: Best DAX trading signals and post-trade analysis
- Costs & spreads: 1
- Minimum deposit: £100
- Overnight financing: 2.5% +/- SONIA
- Account types: CFDs & spread betting
70% of retail investor accounts lose money when trading CFDs with this provider
City Index Expert Review: A Huge Range Of Added Value For Traders
Name: City Index
Description: City Index is one of the oldest spread betting and CFD brokers based in the UK. They were founded in 1983 and offer trading in over 13,500 financial markets, to around 126,000 active clients. City Index is currently owned by StoneX, a US brokerage listed on the NASDAQ valued at $1.75bn.
70% of retail investor accounts lose money when trading CFDs with this provider
Is City Index a good broker?
City Index offers some of the best trading tools and analysis to help traders perform better. Their unique post-trade analytics and voice brokerage service make it an excellent choice for large and frequent traders.
They are one of the oldest and most established trading platforms offering CFDs and financial spread betting, with a huge range of markets to trade, post execution analytical tools and trading signals.
Pricing: Always competitive.
Market Access: Excellent coverage, especially for small-cap stock and exotic currency pairs.
Platform & Apps: Some excellent added value trading signals and portfolio analytics (even though the desktop version can be a bit fiddly).
Customer Service: Lots of experienced dealers to help with any issues.
Research & Analysis: City Index excel here, lots of education, signals and analysis.
Some of the best trader tools around
I opened my first City Index account way back in 2008, when they were one of only a handful of spread betting firms catering to high net worth traders in the City of London. Back then when I was a derivatives broker at MF Global, City Index used to hedge their CFD business through us so I could see they always had a fairly sophisticated client base. But over the years, as traders and investors have become more educated and akin to taking more risk, City Index now takes on more and more private clients.
If you’re thinking about trading with City Index, but haven’t quite made up your mind yet, I’ve tested all their trading platform’s features, visited their offices and interviewed their senior management for my review to hopefully provide enough information for you to decide if they are the right broker for you.I’ve always liked City Index, it’s been a stalwart of the London CFD broker scene since it was founded by Chris Hales and Jonathan Sparke in 1983 as a way for institutions to hedge their exposure through spread betting and CFDs. But soon became popular with more retail traders. Always advertising on billboards in the City, always having a colourful client base, always being bought and sold at the whim of billionaires and bigger boys. But in recent years, it had gone off a bit from its glory days. Back in the good ol’ days, you could open an account and put on a million-dollar trade over the phone with no ID, no deposit, and no idea. Well, you could if you happened to be on a yacht with Michael Spencer (the then City Index owner and City grandee), who was convinced he knew which way the Euro was headed and goaded one of his guests into putting the trade on, as the story goes away.
But those days are long gone and incumbent brokers have to fight hard to differentiate themselves against the fintechs nipping at their heels, as well as provide more trader tools to lure new customers back to traditional markets away from the wild west of Crypto.
City Index seems to have matured nicely though, it’s grown out of its lumbering adolescence under the ownership of Gain Capital and is now owned by US Behemoth StoneX (previously INTL FCStone). Since then, the platform has had a few upgrades and long-term investment products will hopefully be added shortly.
City Index Awards
In our latest awards City Index won “best trading app” in 2024 and “best trader tools” 2023. City Index has in previous years won “best trading platform”, “best trading app” & “best forex broker” in 2022.
Giles Watts, Senior VP of UK & EU at City Index said after winning best trader tools in 2023: “We are delighted to have been recognized for the added value we provide our clients. Delivering actionable post trade insights direct to the platform, is just one of the reasons our clients stay with us over the long term.”
Trading Platform
The City Index platform used to have a slightly off-the-rack feel about it, instead, the business relied on word of mouth and friendly referrals from HNW clients who would use experienced dealers to work large orders over the phone. Whilst voice brokerage still forms part of City Index’s offering, they are, as with everyone else, doing the majority of their business online and working hard to make their platform stand out.
Pricing & Spreads
City Index has always been competitive with it’s pricing. As City Index is an OTC broker they charge customers by widening the spread rather than adding commission after you trade. They are one of the cheapest around for trading UK stocks with the bid/offer being widened by only 0.08% (20% less than the industry standard of 0.1%) and for US stocks they only charge 1.8 cents per share (industry standard is 2 cents per share). Overnight financing rates are also inline with what you would expect 2.5% over/under SONIA rates.
Stocks, Forex, Indices and Commodities
You can buy over 13,500 stocks on City Index as a CFD or financial spread bet, however, you can’t trade equity options or invest in physical shares.
Obviously, they have access to more than the usual forex, index and commodity markets and add value with some nice thematic-themed indices (like ESG), and a good pool of sectors to speculate on. You can also trade options (CFD or spread bets thereof) on a good range of indices and commodities like Natural Gas or EU stocks. Plus, you can trade on synthetic markets. Everyone loves a bit of volatility speculation in choppy markets.
Spread Betting
Spread betting is City Index’s forte, and it’s the product that a lot of their high-net-worth customers use for trading stocks. As one of the original spread betting brokers City Index offers access to one of the widest selections of UK, US and European shares (as well as the major indices). The key advantage of spread betting of course is that profits are free of capital gains tax.
CFD Trading
Unlike spread betting CFD profits are subject to capital gains tax, so are less popular among UK traders. Historically, City Index would offer CFDs to more professional traders and spread betting to smaller clients. CFDs and spread betting are similarly priced with City Index, with the commission being included in the spread, which is slightly wider than the underlying market bid/offer. The main reason why both products are on offer is that spread betting is only available to UK residents, whereas City Index can offer CFD trading to its global client base.
Trading App
I actually prefer the City Index app to the desktop version of the trading platform. Sometimes I can find the desktop version to be a bit clunky, but the app is really slick, and clearly in our mobile-first world, where all the recent development has been focused. And why not, the desktop trading platform is brilliant for research, trading signals and post-trade analytics, but at the point of execution the app is a quick and simple stripped-down version with all the salient features front and centre.
MT4 (MetaQuotes)
You can trade on MT4 and MT5 with City Index, but functionality and market access is not as good as their main proprietary trading platform or some of their MT4 competitors. You can only trade around 84 markets on MT4 through City Index, but if you just want to trade the major markets, City Index is a good broker for MT4 based on their regulation, service and pricing.
Performance Analytics
Another acquisition from parent StoneX is Chasing Returns, now integrated into the platform as Performance Analytics. Which really drills down into where you are trading well and where you are losing money. Performance Analytics can break down your wins and losses and tell you what markets you trade best, what time of day you are most profitable, if you make money trading in quick succession or, if you do better if you take a break between trades. It’ll even tell you if your first trade of the day is often a winner or loser, or if you are a better bull or bear and also if you are as good at trading volatility as you pretend to enjoy doing, but letting you know if you trade better in calm or erratic markets.
Economic Calendar
One thing, though that does let them down is City Index’s economic calendar, it’s terrible. In fact, most brokers, even IG just have a bog standard list of upcoming earnings and economic announcements. But I think you need more from a trading platform these days, especially as when logged into the desktop platform the format is all off. One broker that has absolutely nailed their economic calendar is ThinkMarkets. With TM when you’re logged in you get a really good visualisation of previous data, volatility and most importantly what impact it had on relevant institutions like EURUSD. It’s a great way to see how markets have moved against previous numbers. Honestly, City Index should embed this too as it’s available from Trading Central who they have a deal with anyway.
Extended Hours Trading
You can trade CFDs premarket and after the market closes on a range of US equities in the pre and post-market sessions which bookend regular share trading in New York that takes place between 9.30 a.m. and 4.00 p.m. Eastern time.
The list of 73 stocks available to trade in the pre and post-markets includes leading US shares such as Apple, Microsoft and Nvidia. Widely traded names such as the Ark Innovation ETF, Coinbase, Robinhood and Gamestop.
As well as established blue chips like Bank of America, Boeing, Procter and Gamble, and Walmart, alongside a selection of index-tracking and thematic ETFs.
Pros
- Excellent trading tools
- Post-trade analytics
- Publically listed (part of StoneX)
Cons
- Trading only, no investment account
- Limited options markets
- No direct market access
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Pricing
(5)
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Market Access
(5)
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Online Platform
(4.5)
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Customer Service
(5)
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Research & Analysis
(4.5)
Overall
4.8Forex.com: DAX Index & Currency Trading
- Costs & spreads: 1
- Minimum deposit: £100
- Overnight financing: 2.5% +/- SOFR
- Account types: CFDs
75% of retail investor accounts lose money when trading CFDs with this provider.
FOREX.com Review: 24-Hour Trading Platform Test Drive
Is FOREX.com a good trading platform?
I took FOREX.com out for a 24-hour test drive, trade with real money and try some of their key features on the streets of the City of London. Here’s what happened…
“For FX sake”, I thought to myself when I decided to write a review about a forex broker that offers access to the forex market for forex traders because on the surface, that’s what forex trading platforms do, so I didn’t really think I’d have much to say. I’m not normally a fan of forex trading becuase, a. I’ve never had much success at it and b. I find the nuances of intra-day technical analysis too complicated.
I’m a sort of old-fashioned trader, I like to look at the market and think it’s either overvalued or undervalued and in my mind anyway, that is easier to do when looking at a company’s share price, an index or even a commodity. But for some reason, with forex trading, I’ve never really got the hang of it.
Having said that I have dealt currency for about 20 years now, but more as a broker rather than as a trader. And I know that the currency markets are not only hard to understand, they come with all sorts of complexities. For instance, I used to do some prime brokerage for institutions that would hedge their currency exposure when buying aeroplanes. So we would do deals like buying 50m EURSEK, then roll it forward for delivery in 2 months’ time. A massive headache when trying to market it up. Or dealing in GBPEUR, or was it EURGBP? I remember once, marking up (or down) a forward the wrong way. It would have been a €20k error, but fortunately, the dealer didn’t know what they were doing, so we styled it out. At one point, forex trading for me was a big income generator, but also the type of business I hated most. It was so bad at one point that the broker next to me refused to pick up the phone if he knew it was a big FX trade coming through. He’d get all red and sweaty and pretend to be busy filling another customer.
I was, in fact, so frustrated with how opaque pricing was in currency trading, that I decided to start up my own currency brokerage specialising in high-value currency transfers £250k upwards) and undercutting everyone. It was called Berry FX, you can still see the demo on Youtube. Basically, personal service with the best rates anywhere ever. But alas, I am a better marketer than a salesman, so I now just let other currency brokers compete for clients by trying to offer the best exchange rates.
But you don’t really care about that. You want to know what I think of Forex.com.
24 Hour Test:
I thought I’d try something a little different with this review and have a bit of fun with it. So I took forex.com out for a 24-hour test drive around the City of London, putting some real trades on whilst going about my business to see if I could make any money.
I started out at the Bank of England with £10k on account at 11:30. Lunch was a few minutes walk from the tube station, so I took the opportunity to put some trades on using Forex.com’s trading Signals. I’ve used these for years; back in 2018, they were known as GetGo; it was a stand-alone forex trading app. When I reviewed it back in 2018, I said back that it was the future of forex trading signals but are they still?
There are a couple of things that make these signals better than the rest.
They tell you the success rate
The signal is linked to an order ticket
When I was walking down King William Street to L’Antipasto to meet my contacts at Forex.com for lunch, I put a few traders on. First, I looked at the trades that had a historic success rate of over 50% and followed them. Then I looked at trading signals that had a success rate of less than 50% and traded against them. It’s a pretty simple strategy that generally works (not always, though). Used the classic stop/limit risk/reward ratio to of aiming for twice the potential loss as a potential win. Again, simple forex trading strategies. The market is not hard to call, but if you get a trade right, it often pays to let it run for longer, but if it’s wrong, close it sooner.
Trading Central:
Then after lunch, on the way to my next meeting, I took a few moments on London Bridge, in the glorious sunshine with Tower Bridge in the background, to take a look at some of the other signals on forex.com, Trading Central. Now, Trading Central has been providing technical analysis to brokers for decades and provides a constant stream of manually and automatically updated trading ideas throughout the day to give traders an indication of where the markets may go.
It’s not as fluid as their trading signals, as you have to put the trades in manually, but still gives you a bit of stimulus. This is great for someone like me because I generally have an idea of what I want to do from eyeballing a chart (I did, after all, run a technical analysis division for five years), but it’s nice to get confirmation of your thoughts one way or another.
Execution:
When you are actually trading there are some great other features on the app like:
Swipe to trade: a bit like Tinder (so I hear – I’ve been married for 12 years).
Chart on tickets: with a quick tap, you can bring up a chart when on the order ticket (to double-check)
Working orders on charts: when looking at a chart, you can see your working orders and positions
Position potential: as well as seeing what margin is required when placing a trade you can also see and set your stops and limits as a potential monetary amount instead of pips.
Post-Trade Analytics:
Once you’ve done a bit of trading, you can review your trading history and see where you do well and where you can improve. This is a great feature as it can break down how well you trade by time of day, markets or volatility. You can also set up “Play Maker” if you have a trading strategy and want to stick to it. Obviously, you can’t get that sort of data in a 24-hour test drive, so I’ll have to revisit that another time.
Demo Account:
Forex.com have a pretty good demo account, in fact, it’s hard to tell the difference between the demo and live trading platform. You get the same functionality and as trades are OTC, the same prices.
However, when I opened a demo account to test them, I already had a real account. So after I got my demo account login details, I clicked through to the “webtrader” portal (and this is quite funny or alarming, depending on how you look at it), my live account details were auto-filled in by Google Chrome.
Now, had I not been checking my email, to ensure that they had sent me through my credentials (as Interactive Brokers didn’t for some reason when I tested their demo account), I may not have noticed that I was logging into a live account. It could have been disastrous if I’d started ttrading away thinking it was paper money. Even more so as you get £10k in demo funds and I’d deposited £10k in my live account when I took forex.com on a 24-hour trading signal test drive around The City.
It reminded me of when a trader thought that he was trading on a demo account and put $1bn worth of orders through and then sued his broker because they voided his €10m profits. But, that’s unlikely, to happen to me because even on demo accounts I don’t get thank lucky. And almost certainly won’t happen to you because why would you open a demo account after already having a live one unless you were reviewing it?
TradingView & MetaQuotes
I had a good play about with TradingView, as it’s now the go-to destination for traders. TradingView is a sort of social network for traders where you can view charts (they are excellent) and post trading ideas (a pinch of salt). As TradingView has grown, they have also become an execution venue too, so you can link your Forex.com trading account and deal straight from the charts. This shouldn’t be too much of a stretch for most traders as the charts on the Forex.com app and web-based platform are provided by TradingView (who incidentally are one of the largest financial-based websites in the world now).
You can also trade on MT4, if you are into that sort of thing…
Am I a Forexpert?
I did make money on day one, mainly thanks to putting on a GBPUSD trade that covered most of the losses from some of the other trades. When I used their trading ignals five years ago, I also made money. Day two wasn’t so good, on my way to an investor show, I gave back a few pennies but still ended up on top. But I have to admit my traders were calculated guesses rather than heavily researched positions. I don’t like holding positions overnight, as day trading reduces not only your margin requirements but also increases the amount of sleep you get because you don’t wake up with cold sweats in the middle of the night worrying about Asian interest rates.
Overall would I recommend forex.com? Well, yes, if you are going to trade Forex and don’t know where to start, it’s a massive brand with global reach and owned by a listed brokerage with an institutional pedigree. As far as box-ticking is concerned, they tick the lot. Or should I say pip the lots…
Pros
- Trading Signals
- Post Trade Analytics
- Forex Specialists
Cons
- Limited Market Range
- No DMA
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Pricing
(5)
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Market Access
(4.5)
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Online Platform
(5)
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Customer Service
(5)
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Research & Analysis
(5)
Overall
4.9Pepperstone: Best For Automated DAX trading on MT4
- Costs & spreads: 0.9
- Minimum deposit: £1
- Overnight financing: 2.9% +/- SONIA
- Account types: CFDs & spread betting
75.3% of retail investor accounts lose money when trading CFDs with this provider
Pepperstone Expert Review: Automated Global Trading
Is Pepperstone a good broker?
Pepperstone is a great trading platform for traders who want low costs, wide market access and wide range of trading platforms, including one of the best MT4/MT5 packages available to retail traders worldwide.
Pricing: Razor tight pricing (on their Razor account).
Market Access: Mainly FX, but lots more stocks are being added.
Platform & Apps: Pepperstone’s MT4 and cTrader packages are top-notch.
Customer Service: Local offices around the world and personal account managers for large active traders
Research & Analysis: Lots of education and technical and algo indicator documentation.
Pros
- Tight pricing
- Wide range of MT4 markets
- Pre-built MT4 indicator packages
Cons
- Limited market access
- Only third-party platforms
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Pricing
(5)
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Market Access
(3.5)
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Online Platform
(4)
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Customer Service
(4)
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Research & Analysis
(4)
Overall
4.1Spreadex: Best For DAX Trading With Personal Service
- Costs & spreads: 1
- Minimum deposit: £1
- Overnight financing: 3% +/- SONIA
- Account types: CFDs & spread betting
72% of retail investor accounts lose money when trading CFDs with this provider
Spreadex Expert Review: Financial Trading With Excellent Personal Service
Is Spreadex a good broker?
Spreadex offer some of the best personal service for large spread betting and CFD traders and has built a reputation for great tech and trading and as such won “best spread betting broker” in the 2024 Good Money Guide Awards.
Pricing: Spreadex is super competitive and not afraid to undercut the competition
Market Access: Excellent, lots of access to exotic derivatives and smaller cap stocks
Platform & Apps: All developed in house and quick to add new features
Customer Service: Personal service is what sets Spreadex apart from other brokers
Research & Analysis: A good mix of technical indicators on the Spreadex platform and daily briefings from the financial dealing desk.
Pros
- Spread betting & CFDs
- Smaller cap stock trading
- Great customer service
Cons
- Not publically listed
- No physical investing
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Pricing
(4.5)
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Market Access
(4.5)
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Online Platform
(4)
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Customer Service
(5)
-
Research & Analysis
(4)
Overall
4.4Plus500: Good Global CFD Platform for DAX Trading
👍Featured👍
- Markets available: 2,000
- Minimum deposit: £100
- Account types: CFDs
80% of retail investor accounts lose money when trading CFDs with this provider.
Plus500 Expert Rating: A global markets platform for global trading.
Is Plus500 a good broker?
Yes, Plus500’s trading platform has evolved nicely over the years from a simple interface to an intuitive execution venue for CFDs on the major markets and stocks.
Pricing: It’s dynamic so moves with the market for minimum spreads
Market Access: Very good, Plus500 are always first to try new asset classes
Platform & Apps: Basic execution, but it does the job well
Customer Service: Plus500 doesn’t have a phone option, but its live chat is sufficient
Research & Analysis: Some sentiment, but limited education and analysis.
Overall, Plus500 is a good online trading platform for traders who do not want to do anything more complicated than buy and sell CFDs. The broker does provide sentiment indicators and are quite transparent with costs and fees. In summary:
- Plus500 is a trading platform that offers CFDs.
- You can trade a range of assets on Plus500 including stocks, indices, and currencies.
- There are no commissions when placing a CFD trade on the Plus500 platform but there are some other fees to be aware of.
- The platform offers a range of features including a demo account, alerts, market news, and an economic calendar.
- There are platforms that offer more markets than Plus500.
Pros
- With Plus500, you can trade CFDs on a range of assets including shares, currencies, indices, and ETFs.
- There are no commissions when placing a CFD trade on Plus500’s platform.
- Plus500 offers a range of features to help traders navigate the markets and capitalise on opportunities including charting tools, alerts, an economic calendar, and market news.
Cons
- Other platforms offer more markets than Plus500.
- You can only trade CFDs on the platform (you can’t invest in stocks directly).
- You can’t contact the company by telephone if you require support.
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Pricing
(4.5)
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Market Access
(5)
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Online Platform
(5)
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Customer Service
(4.5)
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Research & Analysis
(4)
Overall
4.6IG: Best Broker For DAX Spread Betting
70% of retail investor accounts lose money when trading CFDs and spread bets with this provider.
IG Expert Review: The original and still one of the best brokers
Is IG a good trading platform?
Yes, IG provides an excellent all-round trading and investing brokerage service. IG pioneered online trading and financial spread betting for private clients and remains not only one of the largest online trading platforms, but also one of the best. IG stands out through deep liquidity, high market range and excellent added value such as trading tools and analysis.
Pros
- Vast range of markets
- Excellent liquidity & DMA equities
- Listed on the London Stock Exchange
Cons
- Customer service can be slow
- No DMA futures trading
- Still charges inactivity fee
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Pricing
(4.5)
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Market Access
(5)
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Online Platform
(5)
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Customer Service
(4)
-
Research & Analysis
(5)
Overall
4.7Interactive Brokers: Best Discount DAX Trading For Professionals
- Costs & spreads: 0.005%
- Minimum deposit: $2,000
- Overnight financing: 1.5% +/- SONIA
- Account types: CFDs, DMA, futures & options
60% of retail investor accounts lose money when trading CFDs with this provider
Interactive Brokers Expert Review: Unbeatable Platforms & Low Costs
Is Interactive Brokers any good?
Yes, Interactive Brokers is simply unmatched in terms of market access, account types and execution options for retail traders. It always has been and remains one of the cheapest trading and investing platforms globally.
Interactive Brokers is an exceptional trading platform that offers institutional-grade trading capabilities to private clients around the world. IBKR has some of the lowest trading and investing fees and the widest market range in the industry.
Pricing: Top marks as IBKR don’t charge a custody (account) fee and commission are the cheapest around
Market Access: Top marks again for the widest selection of markets available
App & Platform: Hard to beat – excellent range of institutional grade execution tools and simple apps for beginners
Customer Service: IBKR let themselves down a bit here. If you are a big customer you get an account manager, otherwise online support is slow
Research & Analysis: Some of the best education, screeners and market data for free on their website and integrated into IBKR platforms.
I’ve used Interactive Brokers for about 20 years now. I’ve interviewed their founder (Thomas Peterffy), their UK MD (Gerry Perez), they’ve been a competitor (when I was a broker myself), a customer and a partner over the years. I’ve traded live with real money when thoroughly testing their platforms.
This included an in-depth conversations with their Head Of Product (Steven Sanders) to get inside insights on the best parts of the platform and services that some clients may not know about. In this review, I lay out my verdict on Interactive Brokers as an industry expert so you can decide if they are the right investing and trading platform for you.
There is one thing that Interactive Brokers gives you above all other brokers, and that is control. You can invest and trade in pretty much anything you want, in pretty much any account type, pretty much how you want.
If you are not familiar with Interactive Brokers (IBKR) they are American, but global, as most American things are, with the notable exception of their news, which always seems to be local. But I digress, IBKR was one of the first brokers to offer electronic trading to the masses. They were founded in 1978 and if you want to know more about the man who founded them and is still running the show, read my interview with Thomas Peterffy, the founder and chairman.
Highlights: The key things to focus on if you are considering opening an account with Interactive Brokers is that:
They are cheap: No other investment or trading platform can match their discount commissions, FX rates and zero account charges
Huge market range: IBKR offer by far the best access to global stock exchanges around the world
They innovate and create :You can invest in so many different ways through IBKR, from their beginner IBKR LITE apps, to their institutional-grade desktop workstation trading platform. They have some of the most advanced and easy-to-use features available to private investors.
Interactive Brokers Account Types: IBKR offer by far the most types of accounts globally including regular investing account, active trader accounts, direct market access, futures, options and fractional stock trading
You can also earn money on your cash, you can buy bonds (high and low yielding), buy warrants, partake in placings, vote on company corporate actions. You can convert currency at 0.2%, which is cheaper than most specialist currency brokers or money transfer apps.
Foreign Exchange: Which actually segues me nicely to prove my control point. With most brokers you have to choose an account base currency (if you are in the UK that is probably going to be GBP) and when you trade, no matter what currency an asset is traded in your P&L will be converted to that base currency. But with Interactive Brokers you can run your account in multiple currencies.
So, if you put in GBP and trade the S&P for example, your P&L will be in USD. If you buy USD stock you get the option to attach a currency conversion to the transaction so you can convert exactly the right amount to cover the purchase, or you can choose to run a deficit in USD.
It’s not such an issue for small traders, as currency exposure, whilst important to be aware of, isn’t the most pressing matter. But if you are running a net flat long/short global macro portfolio, then keeping on top of your currency exposure could be the difference between making money or not.
Desktop Trader: Through ScaleTrader, (one of the founder’s favourite features) IBKR also gives you some very advanced order functionality, the sort you usually only get with professional trading systems like Fidessa (for stocks) or TT (for futures).
If you’re building a big position and don’t want the market to know you’ve got a big order to work, IBKR’s order ticket will let you gradually feed that into the market (but only charge you for the single order).
You can automatically drop bids and offers into the market based on time and price to take advantage of volatile markets. You can also set it to scalp for quick profits in choppy markets.
Pairs Trading: You can trade one stock against another automatically by spread, percentage or price.
Why is that important? Because it can help you build a market-neutral portfolio and when we asked the boss of IBKR the habits he saw in his most profitable customers, (referring back to our interview with him for the third time) he said the ones that traded one stock against another, often did well.
Interactive Brokers Universal Account: You can of course do these things with other brokers, but what you can’t do is do them all in one place.
For this review, I spent a while talking to Steven Sanders, IBKR’s head of Marketing & Product Development, and he said in the twenty years, he’s worked for Interactive Brokers the thing he’s most proud of (other than it being founder lead and therefore very little red tape when you want to get things done) is the implementation of the Universal Account, where everything is done from one account.
What’s amazing to me is that nobody else really offers it. Ten years ago when I was a derivatives broker at Man Financial, we offered everything that IBKR did, but all on separate platforms. We have a couple of big accounts, £20m upwards, that we were always trying to lure back from IBKR with our personalised voice brokerage where you could phone us up we’d take care of your complicated orders for you.
But times change, there is still demand for bespoke voice brokerage, but not as far as Interactive Brokers are concerned. They do offer it from specialists desks if needed, but most trading and investing is done online.
Demo Account: Interactive Brokers does have a demo account, but they call it a free trial instead. This is odd, because you don’t actually have to pay to have an account with IBKR. In fact, Interactive Brokers is one of the only trading platforms that does not have a custody fee for investing in a GIA, SIPP and ISA.
If you want to know more about that, you can listen to my podcast with Gerry Perez, the UK MD, who explains, how they offer such amazing market access for such little cost.
You get a cool $1m to paper trade with on the Interactive Brokers demo account or ‘Paper Trading version’ as they call it. You get access to the easy-to-use investors portal and the more complex IBKR TWS provides delayed market data, simulated trading and access to all of our unique tools and offerings, including the IBKR Risk Navigator, the Volatility and Probability Labs, Portfolio Builder, Research and News.
But, to be honest, I didn’t find the demo account very good. Lots of information was missing and I couldn’t place a trade. I’m not sure why, and actually, that’s going to be a bit of an issue for Interactive Brokers because demo accounts are a great way to get client’s interest. In a world where so many brokerages a vying for the same business, even small hiccups like that can cause a massive drop off rate in opening an account.
Usually, IBKR’s technology is first-rate, but the demo account isn’t up to scratch. I didn’t use the paper trading account, just the live trading platform with real market orders.
Customer Service At Interactive Brokers: It’s not all great, it takes a while to get through on the phone to customer service, and it has a slightly outsourced feel about it (if you know what I mean).
The desktop trading platform, despite its exceptional functionality, is also a bit ‘Windows 95’. But if you don’t need all the bells and whistles, the web based platform, or app has a more modern feel to them.
Options Strategy Builder: Options trading is gaining in popularity in the UK, mainly because of the press attention they derived from meme stocks (where US traders punt via options). But they are still a very complicated product. So what Interactive Brokers has down is create a Strategy Builder product, that essentially reverse the process of putting on options strategy trades.
You tell Strategy Builder what you think the market is going to do. For example, either, go up, stay still, not move for a while, or volatility will increase and it will create an options strategy around that. Instead of you having to know what strategy to put in place or working out the individual options legs.
IMPACT Ethical Investing: In tune with moving with the times, Interactive Brokers has also released the IMPACT app to help people investing in ESG and impact sectors, so they can put their money to good.
You can see the IMPACT dashboard on desktop, but it also operates as a standalone app that connects directly to your IBKR account and scores your portfolio based on how ethical the stocks you hold in it are. Ratings come from FactSet and Refinitiv, and there is this excellent feature that allows you to swap into more ethical stocks.
If one of your holdings is flagged as not that ethical, the app will suggest another one and at the click of a button, it will sell your shares and calculate how many new shares of a more ethical but similar company to buy and do it all for you. If you’re in the US, you can also make charitable donations directly on the app.
Interactive Brokers For Beginners: There is no doubt that Interactive Brokers is a proper trading platform, for those who know what they are doing and cater mainly to the more sophisticated investor. But they are making an effort to open their services up to the newer breed of investor and trader.
It’s standard now among many fintechs, but IBKR were actually the first to offer no commission trading. They also offer fractional shares through IBKR LITE and IBKR Pro accounts and have removed the monthly minimum account charge.
The hope of course is that by onboarding investors when they just start, they can look after their investments for the next 40 years, just as they have been doing for their existing clients for the last 40.
Interactive Brokers runs a Student Trading Lab where students from 600 schools and universities take part in a $1m paper trading account for the purposes of getting a better understanding of the markets. No broker these days can tell you what to buy or sell, but IBKR GlobalAnalyst helps you hunt out undervalued opportunities, across the world, not just in the US.
IBKR offer a Trading Academy, podcasts, webinars and blogs for beginners and experienced traders so that new customers survive the markets to become long-term clients.
Plus, they are cheap.
24-Hour ETFs At Interactive Brokers:Interactive Brokers has a list of 24 selected ETFs available to trade around the clock from Sunday evening, east coast time, through to the close on Friday, by adding these funds to its US overnight trading facility.
Clients who are permissioned to deal in US stocks, are able to trade these ETFs 23.50 hours a day, five days per week, allowing them to react to news stories, macroeconomic and geo-political events as they happen, rather than waiting for US markets to open.
The trading hours and ETFs are available to both retail and institutional clients alike and are traded via the firm’s IBEOS system. Trades can be submitted using multiple order types.
The range of ETFs is pretty broad and includes firm favourites such as SPY, QQQ, DIA and IWM, which track the S&P 500, Nasdaq 100, Dow 30 and Russell 2000 indices respectively. You can also short those indices by trading the SH, PSQ, DOG, and RWM inverse ETFs.
Pros
- Very low dealing fees
- Wide market range
- Direct market access
- Complex order types
Cons
- Customer services can be slow
- No financial spread betting
-
Pricing
(5)
-
Market Access
(5)
-
Apps & Platform
(5)
-
Customer Service
(4)
-
Research & Analysis
(5)
Overall
4.8CMC Markets: Best Broker For DAX CFD Trading
- Costs & spreads: 1
- Minimum deposit: £1
- Overnight financing: 2.9% +/- SONIA
- Account types: CFDs & spread betting
74% of retail investor accounts lose money when trading CFDs with this provider
CMC Markets Expert Review: Great Tech For Active Traders
Is CMC Markets a good broker?
Yes, CMC Markets has always offered, and still does one of the best trading platforms for high-frequency and active traders. It’s a good choice for those who want to trade on tight spreads, with a platform built on exceptional tech.
Pros
- Excellent trading platform
- Good liquidity
- Unique sentiment tools
Cons
- Trading only, no investing account
- Limited smaller cap stocks
-
Pricing
(5)
-
Market Access
(4)
-
Online Platform
(5)
-
Customer Service
(4)
-
Research & Analysis
(5)
Overall
4.6Saxo: Best Broker For DAX Futures & ETF Trading
- Costs & spreads: 1
- Minimum deposit: £500
- Overnight financing: 2.5% +/- SAXO RATE
- Account types: CFDs, futures & options
70% of retail investor accounts lose money when trading CFDs with this provider
Saxo Expert Review: Professional Grade Trading & Investing For Everyone
Is Saxo Markets a good broker?
Yes, Saxo has a great choice of accounts for beginners with SaxoInvestor and for professionals, the more sophisticated SaxoTrader go provides direct market access. The pro platform, analysis, and direct market access may be too complicated for beginners. But, for experienced traders, its coverage, commissions and research are unrivalled.
Saxo Markets is an excellent trading platform for retail traders and investors who want institutional-grade pricing, robust execution and wide market coverage.
Awards: Saxo won best investing app and best DMA/Professional account in 2024. Before that, in our 2023 awards, Saxo won ‘Best CFD Broker’, and ‘Best DMA & Professional Trading Account’. In 2022 Saxo also scooped ‘Best Bond Broker’.
Pricing: Commissions have just been reduced further making Saxo one of the cheapest brokers
Market Access: Saxo offers a huge range of markets for both derivatives trading and physical investing
Platform & Apps: Saxo has an industry-leading robust workhorse of a platform
Customer Service: Experienced dealers for active larger customers
Research & Analysis: Some of the best opinions on the markets around.
Plus, with Saxo posting its best financial results in history (with over $118bn customer funds on account) and now that it has been 70% bought out by J. Safra Sarasin Group, they will be in an even better position to continue to provide excellent market access. This, combined with founder Kim Fournais still owning 28% will keep the firm’s customer-first ethos intact.
Pros
- Direct market access
- Low commissions
- Robust trading platform
Cons
- Seen as a trading platform for professionals
- Have to subscribe for live prices
-
Pricing
(4.5)
-
Market Access
(5)
-
Online Platform
(5)
-
Customer Service
(5)
-
Research & Analysis
(5)
Overall
4.9XTB: Good DAX Trading Educational Material
- Costs & spreads: 1
- Minimum deposit: £1
- Equity overnight financing: -0.02341% / -0.00159% DAILY
- Account types: CFDs
81% of retail investor accounts lose money when trading CFDs with this provider
XTB Review: A Great All Round Trading & Investing Platform
Is XTB a good broker?
XTB, are a decent all-round trading platform and a good choice for most small-to-medium sized CFD traders. They are publically listed in Poland and offer, competitive spreads on a fairly wide range of markets.
The key things to focus on when considering trading with XTB are:
- They have their own proprietary trading platform. When I interviewed Omar Arnaout, the XTB CEO Omar Arnout, he said “I’m really proud of our platform and honestly believe it’s one of the best in the market.” Rightly so.
- They really push client education, XTB won “Best Trading Platform Education” in our 2023 awards (although they didn’t show up to collect the trophy, they never do). You can read their Q&A on forex education here.
- Customer service is paramount. Omar said that “first and foremost is the customer service”. I really agree with this as I think it’s important to have a few different trading accounts (diversify, diversify, diversify) and you’ll trade more with the broker that treats you best.
Pros
- Publically listed
- Mulitple platform choices
- Innovative order types
Cons
- Not UK based
- No DMA
-
Pricing
(4)
-
Market Access
(4)
-
Online Platform
(4)
-
Customer Service
(4)
-
Research & Analysis
(4)
Overall
4eToro: Good For Copying Other People’s DAX Trading Portfolios
- Costs & spreads: 1.5
- Minimum deposit: $50
- Overnight financing: 6.4% +/- SONIA
- Account types: CFDs
51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money
eToro Expert Reviews: One Of The Most Innovative Brokers Around The World
Is eToro a good broker?
Yes, eToro does have its flaws for experienced investors, but if you are just getting started eToro is a great introduction to financial markets. eToro is actually a very innovative trading platform offering copy trading, social networking and unleveraged CFDs.
Pros
- Really simple to use
- Social and copy-trading
- Set your own leverage
- Pre-built sector portfolios
Cons
- Can only trade and invest in USD
- No SIPPs or ISA
- No direct market access
-
Pricing
(4.5)
-
Market Access
(5)
-
Online Platform
(4.5)
-
Customer Service
(4.5)
-
Research & Analysis
(4.5)
Overall
4.6Compare DAX 40 Trading Platforms
| Dax Trading Platform | Dax 40 Trading Costs | Minimum Deposit | GMG Rating | More Info | Risk Warning |
|---|---|---|---|---|---|
| 1 | £100 | See Platform | 70% of retail investor accounts lose money when trading CFDs with this provider | |
 | 1 | £100 | See Platform | 75% of retail investor accounts lose money when trading CFDs with this provider. | |
 | 0.9 | £1 | See Platform | 75.3% of retail investor accounts lose money when trading CFDs with this provider | |
| 2 | £100 | See Platform | 80% of retail investor accounts lose money when trading CFDs with this provider. | |
 | 0.005% | $2,000 | See Platform | 60% of retail investor accounts lose money when trading CFDs with this provider | |
| 1 | £1 | See Platform | 64% of retail investor accounts lose money when trading CFDs with this provider | |
 | 1 | £250 | See Platform | 70% of retail investor accounts lose money when trading CFDs and spread bets with this provider. | |
| 1 | £1 | See Platform | 65% of retail investor accounts lose money when trading CFDs with this provider | |
| 1.5 | $50 | See Platform | 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money | |
 | 1 | £1 | See Platform | 73% of retail investor accounts lose money when trading CFDs with this provider | |
| 1 | £1 | See Platform | 69% of retail investor accounts lose money when trading CFDs with this provider | |
 | 0.6 | £10 | See Platform | 66.95% of retail investor accounts lose money when trading CFDs with this provider |
How To Choose A Dax 40 Trading Platform
The best DAX trading platform for you will depend very much on what you are looking for from your broker. If it’s 24-hour pricing and tight spreads, plus access to thousands of other products then you will probably want to trade with one of the larger brokers such as IG Group or Saxo Bank. However, if you want a more personalised service, then you might prefer a smaller broker such as Spreadex.
Your choice of broker will also be influenced by the products you want to trade.
For example, let’s say you want to spread bet rather than trade CFDs. In this case, you’ll need to choose from those providers that operate as spread betting brokers as well as CFD brokers.
You can compare brokers and decide which one is the best fit for you by using our comparison tables, or if you are interested in investing through ETFs here
Best DAX Trading Platforms By Account Types
You can use this broker to see which broker offers the most types of account for trading the DAX.
| Account Types: | CFD Trading | Spread Betting | DMA | Pro Accounts | Investments | Futures & Options |
|---|---|---|---|---|---|---|
| City Index | ✔️ | ✔️ | ❌ | ✔️ | ❌ | ❌ |
| Interactive Brokers | ✔️ | ❌ | ✔️ | ✔️ | ✔️ | ✔️ |
| CMC Markets | ✔️ | ✔️ | ❌ | ✔️ | ❌ | ❌ |
| Pepperstone | ✔️ | ✔️ | ❌ | ✔️ | ❌ | ❌ |
| Spreadex | ✔️ | ✔️ | ❌ | ❌ | ❌ | ❌ |
| Saxo | ✔️ | ❌ | ✔️ | ✔️ | ✔️ | ✔️ |
| IG | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ❌ |
| XTB | ✔️ | ✔️ | ❌ | ✔️ | ❌ | ❌ |
Cheapest DAX Trading Platforms
You can use this comparison table to compare DAX CFD spreads, overnight financing and minimum deposits.
| DAX Costs |  |  | |  |  | | |  |  |
|---|---|---|---|---|---|---|---|---|---|
| Spreads | 1 | 1 | 1 | 1 | 1 | 0.005% | 1 | 1.5 | 1 |
| Overnight Funding | 2.5% +/- SONIA | 2.5% +/- SONIA | 2.9% +/- SONIA | 2.9% +/- SONIA | 2.5% +/- SAXO RATE | 1.5% +/- SONIA | 3% +/- SONIA | Long -0.01% Short -0.0015% | -0.02341% / -0.00159% DAILY |
| Minimum Deposit | £100 | £250 | £1 | £1 | £500 | $2,000 | £1 | £20 | £1 |
Best DAX Trading Platforms For Added Value
You can use this comparison table of futures brokers that offer DAX trading to see which providers offer the best features for advanced and beginner traders.
| Advanced Features: | Voice Brokerage | Corporate Accounts | Level-2 | Algo Trading | Prime Brokerage |
|---|---|---|---|---|---|
| Interactive Brokers | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ |
| Plus500 | ❌ | ✔️ | ❌ | ❌ | ❌ |
| Saxo | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ |
Best Dax Trading Platforms For Beginners
| Beginner Features: | Trading Signals | Webinars | Leverage Control | Investment Account | Mini Contracts | Micro Contracts |
|---|---|---|---|---|---|---|
| Interactive Brokers | ✔️ | ✔️ | ❌ | ✔️ | ✔️ | ✔️ |
| Saxo | ✔️ | ✔️ | ❌ | ✔️ | ✔️ | ✔️ |
| Plus500 | ✔️ | ❌ | ❌ | ❌ | ✔️ | ✔️ |
Best DAX Trading Platform For Futures
We currently rank Saxo Markets as the best broker for trading the DAX based on our trading platform matrix.
DAX Futures contracts are a form of derivative through which traders can speculate on the future price of a commodity or financial instrument, in this case, the future value of the DAX40 index.
DAX futures trade quarterly in a December, March, June and September cycle, and each contract reflects the market’s expectations for the value of the Dax out to that point in time.
These contracts are traded on a rolling basis and as the front-month contract expires, so another contract is added to the end of the sequence to replace it.
DAX40 futures are cash-settled meaning that buyers and sellers of the contract pay or receive money depending on the outcome of their trade as such there is no need to undertake or accept delivery of the stocks that make up the index.
Trades are cleared and settled through the clearing house that acts as the counterparty to all DAX futures trades. Futures trades are undertaken on margin. Traders place an initial margin or deposit at the inception of the trade and add variation or maintenance margin, as and when required, throughout the trades lifetime.
Best DAX Trading Platforms For CFDs
We currently rank CMC Markets as the best broker for trading DAX CFDs based on our matrix and scoring system.
All DAX contracts that are settled in cash are considered to be Contracts For Differences. Under which, the buyer and the seller are either credited or debited, at the settlement of their trade, based on their PnL performance, instead of making or taking delivery of the underlying asset.
A CFD on the Dax index works in precisely the same way, CFDs on the Dax are similar to the futures contracts we discussed above, though there are some key distinctions.
CFD contracts on the DAX trade off-exchange in what is called OTC or Over The Counter trading. Such CFD contracts are not settled through a dedicated clearing-house that means the counterparties to a trade are the customer and their CFD provider or broker.
Trading off-exchange or OTC allows for a higher degree of flexibility, for example, there are no fixed expiry dates for Dax CFDs or indeed fixed contract sizes, though there will be minimum trade sizes.
Futures contracts on the DAX have a contract size of €25 per point so that if the Dax index stands at 10,000 points one full DAX futures contract has an underlying value of €250,000.
DAX CFD traders can usually deal in much smaller sizes, for example, in say €5.00 per index point, which is equivalent to one-fifth of the value of the exchange-traded futures contract.
Best DAX Trading Platforms For Spread Betting
We currently rank IG as the best platform for Dax spread betting based on the data in our broker matrix.
A spread bet on the DAX index shares features with both the futures contract and DAX CFDs. However, there is a difference between the spread bet and the other two, and it’s an important one. The difference is that the spread bet is structured as a bet and not a trade.
When you Spread bet, you bet in pounds or pennies per point (or units of another currency), and you bet on the rise or fall of the DAX index, and your bookmaker is the counterparty to the bet.
Bookmakers offer their clients a range of bets with different life cycles, for example, daily, monthly or quarterly bets.
However, the crucial difference between a spread bet on the DAX and CFD trades on the index is how any profits you make are taxed. Under current UK legislation profits made from betting by individual UK taxpayers are not subject to tax. However, losses arising from spread betting are not able to be offset against capital gains made elsewhere.
Profits arising from CFD trades are subject to tax, though CFD trading losses can be offset against capital gains made elsewhere.
That tax treatment has made spread betting very popular among UK retail traders, however, you should note that as opposed to fixed-odds betting the potential losses in spread betting are not limited to your initial stake.
Best Dax Trading Platforms For ETFs
We currently rank Saxo Markets as the best platform for trading and buying DAX ETFs according to our broker data.
DAX ETFs or Exchange Traded Funds are open-ended funds designed to mirror the performance of a given index, a sector or even an investment strategy.
Most ETFs are what are known as passive investments that track a given benchmark rather than attempting to outperform it. ETFs can be traded just like individual shares; they have proved popular among investors as they offer a low-cost replication of an index or sector’s performance. Added to which they allow traders to quickly gain exposure to groups of stocks or asset allocation themes.
The ETFs on the DAX40, aim to mirror its performance and they are likely to own a basket of Dax constituent shares, or a series of derivative contracts over those, or similar assets, to do so.
If you’re optimistic or bullish about the DAX then you would buy a DAX ETF, if you’re are pessimistic or bearish about the prospects for the index then would sell a DAX ETF.
ETFs can be shorted, that is selling something without owning it first, in the hopes of repurchasing the position, at a lower price, to make a profit at a later stage. It would be wise to check with your broker to find out if there are any restrictions on this before doing so, however.
There are many ETFs tracking the DAX index, one of the largest is the Core DAX UCITS ETF, managed by Blackrock, through its iShares division. This ETF was established back in December 2000, and according to recent data from the manager, it has captured cumulative returns of more than +85% since then.
DAX Trading Platform FAQ:
There are multiple financial products derived from the underlying DAX Index that you can trade with, including:
- Index Futures (EUREX)
- Index Options (EUREX)
- Exchange-Traded Funds (GMG Guide on ETFs)
- Investment Funds
- Spread trading
- CFDs
Read the GMG Guide on Index Trading.
To trade the DAX 40 profitably requires a good trading strategy. The following tips may help you to maximise your chances of trading the DAX 40 successfully over the long term.
- Understand your requirements for trading the DAX 40. Are you an intra-day or positional trader? Do you invest for the long term? Are dividends important?
- Research various technical (or fundamental) indicators to support the trading objective. There are many technical indicators that you can use, including
- Trend indicators like moving average
- Oscillators
- Support & resistance levels (see GMG Guide on Support/Resistance)
- Patterns like breakout and reversals
- Backtest these indicators if they are profitable over time. Select a few that you can understand. Check their pitfalls and signal variations over time. Put these indicators into a trading software and backtest. Is it profitable? Can you withstand the drawdown?
- Select the indicators that best suit the objectives. Once the initial backtest research is completed, setup a mock testing period of, say, six weeks. Assess the results. Are they good? Which type of indicators works better?
- Include risk management factors in your assessment. Important factors like position sizing, leverage levels, stop loss levels and risk-reward ratios must be specified. Trading without risk management is like driving without brakes and safety belts.
- Select trading platforms that support your operations. Capital requirements, platform fees, and trading capability are all important factors to look for. See the comparison table above.
- Commit capital and go live. Make sure that you drip feed capital into new strategies because there may be many things to iron out before you’re comfortable with it.
The DAX effectively trades around the clock through a combination of index futures and prices that are derived from them and the moves in other significant indices. Many OTC brokers quote 24 hours prices in the DAX. However, spreads may widen and volumes traded be lower, the further we move away from German market hours, simply because there are fewer active participants in the market at these times.
The DAX is one of the most actively traded equity indices in the world, representing as it does both Germany and the broader export-led Eurozone economy. The front-month futures contract often trades in well in excess of 100,000 lots per day and has open interest in the tens of thousands of contracts.
Being actively traded, with only 40 constituents, the DAX index moves around and often does so more quickly than broader equity indices, which is why it is so popular with traders. However, the average level of volatility in the index since October 2017 is just 16.54 percent on a scale that runs between zero and one hundred. So while that’s a higher level of volatility than some peers, it’s still relatively low over the longer term.
The DAX Index is Euro-denominated. If you are trading in the UK with a GBP-denominated account make sure that you cover any currency deficit from trading losses.
The index is maintained by the Deutsche Börse Group.
The German DAX40 index (Deutscher Aktienindex) is an equity index launched in 1988 that tracks the performance of 40 of Germany’s leading stocks. Launched in 1988 with an initial base value of 1000, the index has risen substantially since then and touched an all-time high of 13,596 in 2018.
Current DAX constituents are:
- Adidas AG ADS
- Airbus SE AIR
- Allianz SE ALV
- Basf SE BAS
- Bayer AG BAYN
- Bayerische Motoren Werke AG BMW
- Beiersdorf AG BEI
- Brenntag SE BNR
- Continental AG CON
- Covestro AG 1COV
- Deutsche Bank AG DBK
- Deutsche Boerse AG DB1
- Deutsche Post AG DPW
- Deutsche Telekom AG DTE
- Deutsche Wohnen SE DWNI
- E. On SE EOAN
- Fresenius Medical Care AG & Co. KGaA FME
- Fresenius SE & Co. KGaA FRE
- HeidelbergCement AG HEI
- HelloFresh SE HFG
- Henkel AG & Co. KGAA HEN
- Infineon Technologies AG IFX
- Linde Plc LIN
- Mercedes-Benz Group AG MBG
- Merck KGAA MRK
- MTU Aero Engines AG MTX
- Muenchener Rueckversicherungs-Gesellschaft AG MUV2
- Porsche Automobil Holding SE – PRF PERPETUAL EUR 1 PAH3
- Puma SE PUM
- Qiagen NV QGEN
40. Remember that this index only contains 40 stocks, so it is not a wholly representative index of the entire German economy.
The top three stocks in the index, by market capitalisation, are SAP, Linde, and Siemens.
The biggest ETF based on the DAX Index is the DAX 40 ETF (ticker: DAXEX). This ETF is gaining popularity because of the ease of trading, unlike futures or options where there are rollover costs and expiry dates.
DAX index futures, they usually expire on March, June, September, and December.
To invest in the DAX, you can either buy an ETF or mutual fund that specifically tracks the DAX or a range of large-cap German equities. ETFs will try to replicate the performance of the Dax, both on the upside and downside. Investing in this way should provide you with the index return. The mutual fund may try to do the same, but it could also try to outperform the benchmark, through active stock selection, though this is becoming harder to achieve as passive investments grow in popularity.
Alternatively, you could invest directly into a basket of German equities selecting from the constituents of the DAX, for example owning the five stocks highlighted in the graphic above, would expose you to approximately 42% of the DAX by market cap. However, it’s always best to seek professional advice to make sure that any investment is suitable and matches your particular requirements before you jump in.
The German DAX40 Index is closely watched. The index is attractive to investors and traders alike because:
- DAX stocks are highly international and these companies derived their earnings globally
- DAX 40 offers good liquidity – as some of these stocks are huge (e.g. SAP, Allianz, and Siemens)
- DAX 40 offers a good exposure of leading industrial companies such as BMW and Linde.
Moreover, Germany companies are export oriented and they are hugely beneficial from firm global economic growth.
Remember that, with only 40 constituents, the DAX Index may be more volatile than broader equity index. Hence its popularity with traders.
Stock markets are often driven by a wide variety of factors. For the German stock market, the number one factor global growth. This is because these companies are global in nature and derive their earnings from many markets.
Other important factors include:
- Monetary factors (e.g., Quantitative Easing, rates movements, yield curve etc)
- Technical factors (e.g., new highs or lows)
- Earning factors (e.g., profitability and earnings momentum)
Investing in the DAX implies the long term ownership of assets related to the index. Whereas trading in the DAX, or indeed any other financial instrument or commodity, suggests short term speculation. Perhaps through spread bets or CFDs, that don’t confer ownership of the underlying assets, just an interest in the rise and fall of the index value.
Yes, you can read about the major indices in our guide to the best indices for index trading.
This article contains affiliate links which may earn us some form of income if you go on to open an account. However, if you would rather visit the DAX trading brokers via a non-affiliate link, you can view their DAX40/GER40 trading pages directly here:
