Lesson Learned: Not respecting DAX volatility around macro news
Back in March, I got caught badly trying to fade an initial move in $DAX after a particularly hot CPI print from Germany. My system usually handles the intraday chop fine, but I underestimated the velocity and extended range when macro news really hits the wires. Instead of letting the market settle for 15-30 minutes, I jumped in almost immediately thinking the initial spike was overdone.
The lesson? That first reaction isn't just noise; it's significant institutional re-positioning. Moving forward, I've adjusted my rule set to completely avoid any trade entries in the first 30 minutes following major European macro data releases, especially for indices like DAX which are highly sensitive. Waiting for consolidation and clear levels to re-establish themselves has saved me a few headaches since.
That's a tough lesson, and one many traders have learned the hard way with major news events. Do you have a rule now to completely sit out the first X minutes after key data, or do you wait for specific price action to confirm a direction before re-engaging?