DislikedMay 30th ... {quote} July 12th ... {quote} You have to love those retail traders and their daft ideas about picking bottoms...Ignored
Welcome to the thread
The crowds try to pick bottoms during a downtrend and try to pick tops during an uptrend. Sometimes they will be right, but it's usually better to trade with the trend than against it. For this reason, SSI can be a powerful contrarian indicator as you can see from this graph.
http://media.dailyfx.com/illustratio...Picture_16.png
The graph above overlays the AUD/USD chart on a bar graph of SSI for the same time period. Notice that when SSI is positive (green bars show when traders are net long), AUD/USD tends to fall, and when SSI is negative (brown bars show when traders are net short), AUD/USD tends to rise.
No indicator works 100% of the time (if you know of one, please tell me ) That's why it's important to use stops to cut losses on a trade that's not working out.
Jason