[SuperDriveGuy]

Hi All,
Sorry, if this has been asked before, but I tried searching and cannot find the information I am after(even Google shows mostly spread betting results!)

Basically, I want to trade the spread between the DAX(Eurex - FDAX) and FTSE(Liffe - Z). These are highly corelated. So far the information I have is...

FTSE(Z) = 5144(current price) * GBP 10(point value) * 1.56(1 GBP= 1.56 USD futures price) = USD 80,246

DAX(FDAX)= 5543(current price) * Euro 25(point value) * 1.37(1 Eur = 1.37 USD futures price) = 189,847

So the FTSE/DAX ratio is 2.36/1 i.e I need to have 24 FTSE contracts to 10 DAX contracts to have a good hedge(my more likely trade would be 5 FTSE to 2 Dax).

The information that I don't have is how is the spread charted and traded, one way I can see is DAX divided by FTSE another way is DAX minus FTSE. What are the methods available for charting the spread? I am using DAX/FTSE but anyone spreading any other indices will also give me a clue.

What Indicators can be used to trade the spread? BollingerBands, Keltner Channels, MA's, MACD etc???

Any input is much appreciated.

Thanks,

SDG