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Trade Against The 90% That Lose Money 2nd Dec
Retail traders are notoriously wrong at picking market direction/tops and bottoms. Most retail traders very naturally seem to adopt a counter-trend stance and this offers very accurate signals for individuals looking to trade against this group. This daily report is designed to help traders focus their efforts on higher probability pairs.
So what are the signals?
Strong Short 66% Retail Longs
Short 60% Retail Longs
Long 60% Retail Shorts
Strong Long 66% Retail Shorts
We are looking for 60%+ (Ideally for best opportunities 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 Strong Short and Strong Long areas.
What’s New Today? The USDCAD is back in the short zone. The USDJPY remains firm in the strong short zone but continues to climb higher. Its important to note that liquidity providers (the guys on the other side of the trade) are positioned to the short side. The recent move in the USDJPY is an anomaly in our data.
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Has anyone ever tried this strategy on a consistent basis? What kind of results does it give?
One thing I should say is that this is not a system or a signal service. Its an extra probability tool for your decision making process, for instance if a pair is in the short zone, try and focus on opportunities and set ups on the short side. I would say as a whole the tool is very accurate and provides a good easy to analyse contrarian tool in helping determine a bias in your trading direction. The USDJPY has consistently been in the short zone for many months now, in that time it has dropped around 1000 pips. No matter how well it performs historically it can be incorrect sometimes as we have experienced this last month with the USDJPY. Focus your energies on good set ups and use the tool for the purpose of bias.
Still shorting that USDJPY?! LOL
haha yup. Its a interesting anomally BeerGoggles, been using this data for almost 3 years. Seen this kind of movement against the report only on 2 occasions, these last few weeks with the USDJPY and with the AUDUSD in July 2008 being the last just before the crash. Liquidity provider positioning is biased to the short side for USDJPY and usually this is followed by most fx pairs.