The Jens Klatt DAX Break-Out strategy
Trader Jens Klatt and his DAX-ORB strategy
Jens Klatt took inspiration from trader Toby Crabel. Toby Crabel wrote a book in 1990, which has become a classic: "Day trading With Short Term Price Patterns And Opening Range Breakout". Jens Klatt adapted Crabel's Open Range Break-out (ORB) strategy to trade the German DAX index. The DAX-ORB strategy was born.
|Designed for||: DAX index
|Instruments||: Futures and CFDs
|Trading type||: Day trading
|Trading tempo||: 1 signal per day
|Using NanoTrader Full||: Manual and (semi-)automatic|
|Budget||: FREE trading strategy|
A break-out from the DAX opening range
An opening range is a channel based on the market price during a certain period at the beginning of the day. Jens Klatt's opening range is based on the price of the DAX future before the market opens. The DAX-ORB opening range channel is automatically drawn by the platform in the chart. The channel is represented by two blue horizontal lines.
The DAX-ORB strategy also includes a trend filter. The trend filter selects the signals. Indeed, not every channel break-out is a good signal. Only signals in the direction of the trend can be traded. If the trend is positive, the trend filter colours the chart background green. If the trend is negative, the background of the chart is red.
This example shows a buy signal. The DAX breaks out of the DAX-ORB channel. The buy signal can be traded because the trend is positive (green chart background). The trader buys a position.
This example shows a short sell signal. The DAX breaks downwards out of the DAX-ORB channel. The market trend is negative (red background chart). The trader opens a short sell position.
This example shows a buy signal. The DAX breaks out of the DAX-ORB channel. The trend filter shows that the trend is positive. The trader buys a position.
Closing the DAX position at the right time
The DAX-ORB strategy includes a price target order and a stop loss order. The stop loss order is placed on the opposite side of the opening range channel. The price target is 2x the risk of the stop loss. NanoTrader places these orders automatically.
What to do when both the price target and the stop loss orders are not reached during the day? The DAX-ORB strategy solves this with a time filter. The filter automatically closes the position at the market price at 21h45. The trader has no position overnight, and is for a new signal the next morning.
This example shows a trader with a position after a buy signal. The DAX price reaches the price target (green line). The position was closed with a profit. The stop loss (red line) is on the other side of the opening range channel.
The result of this DAX trading strategy
This is a back-test of the DAX-ORB strategy on the FDAX futures contract.
Putting this FREE strategy into practice
Follow these steps in NanoTrader Full:
1. Open the chart of the instrument you want to trade.
2. Select "WHS DAX-ORB" in the "WHS Strategies" folder.
3. Activate TradeGuard+AutoOrder in the chart to trade semi-automatically and AutoOrder to trade automatically.