I use Axxis MetalMaster... Rock solid braking performance with zero dust and zero fade. I have PBR Ultimate on my other car... Ultimate is ceramic and is dusty... one fuel tank is one week OEM pad.

As for the Brake fluid... the reason they have blue and gold is so when you flush them out... you can tell where old fluid ends and new come out. It's the same stuff with different coloring. You definitely need to bleed your brake system... 540i brake are monster!