Master the DAX 40 & FTSE 100: Powerful Multi-Timeframe Strategy for Consistent Profits on MT5

The DAX (Germany 40) and FTSE 100 (UK 100) are two of the most liquid and widely traded European stock indices. Both instruments are popular among day traders and swing traders because of their high volatility, clear economic drivers, and extended trading hours through CFD brokers. 

One of the most effective ways to increase the probability of successful trades on these indices is the use of multi-timeframe analysis on the MetaTrader 5 (MT5) platform. This article explains step by step how to implement this approach, which timeframes to choose, how to align them, and practical rules that traders commonly ask about.

What is the DAX?

The DAX, officially known as the Deutscher Aktienindex, is the primary stock market index of Germany and one of the most important benchmark indices in Europe. It consists of the 40 largest and most liquid companies listed on the Frankfurt Stock Exchange, measured by market capitalization and trading volume. 

Major constituents include globally recognized names such as SAP, Siemens, Allianz, Deutsche Telekom, Mercedes-Benz Group, and Adidas. The index is calculated in real time during trading hours (09:00–17:30 CET) and is regarded as a reliable indicator of the health of the German economy, which remains the largest economy in the Eurozone. 

Because of its heavy weighting toward export-oriented industrial, automotive, pharmaceutical, and technology firms, the DAX is particularly sensitive to global trade conditions, euro strength, and European Central Bank policy decisions.

What is the FTSE 100?

The FTSE 100, commonly referred to as the “Footsie”, is the leading stock market index of the United Kingdom. It tracks the performance of the 100 largest companies listed on the London Stock Exchange by market capitalization. Prominent members include multinational giants such as AstraZeneca, HSBC, Unilever, Shell, BP, GlaxoSmithKline, Diageo, and Rio Tinto. 

The index is heavily weighted toward financial services, energy, mining, consumer goods, and pharmaceuticals, with a significant portion of revenues generated outside the UK. Trading hours run from 08:00 to 16:30 GMT, and the index serves as the main barometer of British economic confidence. It is also influenced by commodity prices, Bank of England monetary policy, and global risk sentiment due to the international nature of its constituent companies.

What Is Multi-Timeframe Analysis and Why Does It Matter for DAX and FTSE?

Multi-timeframe analysis means examining the same instrument on several different chart periods at the same time. The purpose is to identify the higher-timeframe trend and structure while executing entries on lower timeframes with better risk-reward ratios.

For indices such as the DAX and FTSE, the higher timeframes filter out much of the European session noise and London-New York overlap volatility, whereas lower timeframes allow precise entry timing during the most active hours (08:00–17:30 CET for DAX and 08:00–16:30 GMT for FTSE).

Traders who use only one timeframe frequently find themselves fighting the prevailing trend or entering too late. Multi-timeframe analysis solves both problems.

Recommended Timeframe Combination

The most widely used and proven combination for day trading and swing trading the DAX and FTSE is the following triple-screen system:

1. Higher timeframe (trend filter): Daily (D1) or 4-hour (H4)
2. Middle timeframe (trade setup): 1-hour (H1) or 30-minute (M30)
3. Lower timeframe (entry trigger): 5-minute (M5) or 15-minute (M15)

Step-by-Step Workflow on MetaTrader 5

1. Open three charts of the same instrument (DE40 or UK100, depending on your broker’s symbol name) with the three chosen timeframes.
2. On the highest timeframe (D1 or H4)
   • Draw major support and resistance levels (previous swing highs and lows).
   • Add a 20-period and 50-period exponential moving average (EMA) or the classic 200 EMA to define the trend.
   • Determine the trend direction: price above the EMAs and making higher highs/higher lows = bullish bias; the opposite = bearish bias.
3. On the middle timeframe (H1 or M30)
   • Look for alignment with the higher-timeframe trend.
   • Identify corrective structures (pullbacks, flags, triangles) or breakout setups near the higher-timeframe levels.
   • Mark smaller support/resistance zones and Fibonacci retracement levels (38.2%, 50%, 61.8%) of the most recent higher-timeframe swing.
4. On the lowest timeframe (M15 or M5)
   • Wait for price to enter the zone identified on the middle timeframe.
   • Look for reversal candlestick patterns, pin bars, engulfing patterns, or a small trend line break in the direction of the higher-timeframe trend.
   • Place the entry, stop-loss (usually beyond the recent swing on M15/M5), and take-profit at the next logical level or with a minimum 1:2 risk-reward ratio.

Practical Rules Most Traders Want to Know

Question: Can I trade against the daily trend if the lower timeframes look overstretched?
Answer: Experienced traders sometimes fade in extreme overbought/oversold conditions, but beginners should only trade in the direction of the daily or H4 trend until they achieve consistent profitability.

Question: Which indicators work best with this method on DAX and FTSE?
Answer: Keep the charts clean. The most reliable combination is:

• 20 EMA and 50 EMA on all three timeframes for dynamic support/resistance
• Volume profile or simple tick volume on MT5 to confirm strength at key levels
• RSI (14) only on the middle timeframe to avoid entries into extreme overbought/oversold areas when trading with the trend

Question: Where should I place my stop-loss?
Answer: Typical placements:

• For buys: 5–10 pips below the most recent swing low on the entry timeframe
• For sells: 5–10 pips above the most recent swing high
• Never place the stop exactly at the level; give the market a small buffer because DAX and FTSE often hunt visible stops during news releases

Question: When is the best time of day to apply this setup?
Answer:

• 08:00–10:00 CET (European open) – high volatility on DAX
• 13:00–16:30 CET (London–New York overlap) – strongest moves on both DAX and FTSE
• Avoid trading 30 minutes before and after major economic releases (ECB rates, German ZEW, UK GDP, US NFP) unless you specialize in news trading

Question: How many trades per day is realistic?
Answer: With strict multi-timeframe alignment, most traders usually find one to three high-probability setups per day on either DAX or FTSE. Quality matters far more than quantity.

Common Mistakes to Avoid

• Switching to lower timeframes too early before the higher-timeframe trend is clearly defined
• Ignoring upcoming economic events that can cause stop runs
• Moving the stop-loss to “give the trade more room” when the original setup is invalidated
• Trading both DAX and FTSE at the same time without sufficient margin and attention (they often correlate strongly)

Conclusion

Multi-timeframe analysis on MetaTrader 5 is one of the most robust and straightforward methods for trading the DAX and FTSE. By always aligning the higher-timeframe trend with middle-timeframe setups and low-timeframe triggers, traders significantly improve their win rate and risk-reward ratio. 

The method requires discipline and patience, because valid setups do not appear every hour, but when the three timeframes align the probability of success increases substantially. Start with a demo account, apply the exact rules described above, and only move to live trading once you can follow the system without deviation for at least 50 practice trades.