The DAX comprises Germany’s largest and most financially successful companies such as Siemens, BMW, Deutsche Bank and Adidas. These large companies, together, make up around 75% of the German stock exchange. This well-known stock exchange is also very often compared to America’s Dow Jones Industrial Average.
To give you an idea of the significance of the DAX, it represents over a whopping 80 countries outside of Germany and is therefore very responsive to outside market influences. As a capitalization-weighted index, its stocks are measured by market value of outstanding shares and companies are chosen according to market capitalization, order book volume and are reviewed each quarter.
The majority of companies listed on the DAX stock exchange also trade in the US and are excellent indicators of US market trends as DAX trading opens before the US markets. In addition, the DAX market is very sensitive to global events and happenings such as political unrest, natural disasters, economic turmoil and wars. Other influencing factors include the EU job situation, GDP figures and interest rates. It is therefore crucial, if you want to be successful in DAX trading, to pay attention to these aspects and to predict how the market will act.
Trading the DAX stock exchange can offer lucrative profits if you take the above into account and pay close attention to market conditions before you begin trading. It is vital to always make an informed and analytical decision before acting as this could mean the difference between losing or gaining great profits.
New to DAX trading and need a bit of a crash course? Everyone who knows anything about trading will know that the DAX (which stands for Deutscher Aktien Index) is Europe’s most influential economy to pay attention to.