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Daily FX Retail Trader Contrarian Analysis
Retail Traders as a herd are wrong…most of the time (sorry guys its true).
This daily report is designed to help traders find opportunities to trade against this group. The premise is very simple we are looking for 66% of retail traders to be trading either long or short a currency pair, we then look for opportunities to fade (trade against) this group. For example if 72.99% of traders are long the USD/CHF we look for opportunities to short that pair.
The pairs that we feel offer the highest opportunity for success are described in the Shortand Long Zones.
What’s New Today? Retail Short positions in the EUR/USD have weakened a little (needed a few percentage points to hit the magic 66% number). On the flip side we have are seeing further strengthening of the retail longs in the USD/JPY and EUR/CHF.
Provided by Pivotfarm - The Home of Support and Resistance Trading
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I never read whole articles but the way you wrote this information is simply amazing and this kept my interest in reading and I enjoyed it. I read your post and I found it amazing. Your thought process is wonderful.
Regards,
moulin farine
Does your data include option trades? If not, you're missing an important segment of the market [read leverage on leverage]...
It is such an important topic and ignored by so many, even professionals! I do enjoy writing but it just seems like the first 10 to 15 minutes are lost simply just trying to figure out how to begin. pellet mills
If Orly says it's time to sell, I'm selling.
Hey guys
Maybe I will write up an article explaining the process we use to put this together some time. Essentially we collect this data from a variety of brokerages and create averages (the percentages you see above). USDJPY is a perfect example, retail traders have been long this pair in the 66%+ range for over 3 months yet it has continued lower. This contrarian information is in our experience very consistent and an easy to use tool in the analysis of a trade. It is NOT the Holy Grail, just another tool you can choose to use if you wish.
Please do an article explaining the methodology. Find sometimes it is contrarian to my own analysis. But, I am almost always wrong, anyway.
So a short/long bullshit indicator is provided by a retail FX broker who says it can help you make money by being on the other side of an indicator nobody knows how it has calculated,but presented as fact by a retail FX broker,which will in all likelyhood scam you like 99% of retail FX brokers by taking the opposite side of your trade!!!
Their bid/ask spread will be so huge that they can immediately short your long and buy your short,and they will charge you commission for the privilege of picking your pockets how do you think these brokers make so much money?by giving you a good deal?
Google "Forex broker scam" and see what you get.
This is only relevant to the extent that the data is aggregate market data...if it is data from only one trading platform (or a few att most), which represents only a fraction of the retail market...then it is of absolutely no use!
SPX has tripped 1155 while the EURJPY has tripped 113.88. Those are key signals.
Get your scalping robots on EURJPY, Only Short. You can thank me later.
:D
Thanks but let's see if after tomorrow's drop (something in between 1105-1125) we'll see a rocket powered reversal that will overtake 1155.
Pivot Farm gets this info from Daily FX.
DailyFX...it is one amusing site. "The Dollar-Yen might go up, but if it doesn't, we feel quite strongly it will either meander sideways or go down. To support this thesis, we've taken the square root of the close and multiplied it times Pi and then we calculated the 38.214289% Fib Retrace."
BTW: The Daily FX site does claim to have 3-4 years of historical data on the Sentiment Index for backtesting purposes. It would be interesting if Pivot Farm would post some basic performance results? If it's as good as he says, it should be supportive. [That stated, the idea of using the "SSI Contrarian Indicator" "because retail customers are usually wrong"...which comes direct from a retail trading website, while being marketed to...you guessed it...retail traders...does have a Lewis Carroll quality to it.]
Finally, are these Pivot Farm posts, paid advertisements?
If so, what's next? A Mad Hedgefund Trader "post" pumping an investment in Pfizer "because Viagra is freaking awesome."... with a link to his pharmaceutical site?
Where are you getting these ratios from considering that CFTC only provide weekly reports? Is it your broker? In which case, it's only the broker's data.