rpm, where do you get your position info from?
FXCM's DailyFX+ to expand & include Forex Stream & Bloomberg TV 10 replies
Anyone use FXCM Dailyfx + ? 3 replies
FXCM Dailyfx commentary as contrarian Indicator?? 30 replies
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DislikedBelow is the latest currency correlation report from DailyFX....Ignored
DislikedHi cprao,
Thanks for the post and great question. It's helpful to go back every now and then and talk about retail traders and why SSI positioning can be used as a contrarian indicator.
Retail forex traders like to fade momentum. Traders often sell into rallies and buy into declines. They tell themselves..."look at how much the market has moved, it can't possibly go any further! I'm calling the bottom, time to trade the retracement!". Only to see the market continue trending.
I'm of the same opinion that volume should follow trend. The problem...Ignored
DislikedJason,
Are you implying here that trading fib retracements aren't useful?Ignored
DislikedJason,
I think a good way to filter the SSI signals would be to use the correlation chart and the most extreme SSI readings. For example:
Most extreme SSI reading over the last week has been u/ca, and the next most extreme signal has been u/ch, and both pairs with a "+" number. Since these 2 pairs are correlated, go short on u/ca because it's the most extreme reading, but don't go short on u/ch. The FXCM analysis over the last week has been to go short on u/ch since SSI has been "+". However, u/ca charts have been decreasing and u/ch has...Ignored
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USDCAD – The ratio of long to short positions in the USDCAD stands at 2.96 as nearly 75% of traders are long. Yesterday, the ratio was at 3.08 as 76% of open positions were long. In detail, long positions are 11.9% lower than yesterday and 0.3% weaker since last week. Short positions are 8.2% lower than yesterday and 16.3% stronger since last week. Open interest is 11.0% weaker than yesterday and 0.6% above its monthly average. The SSI is a contrarian indicator and signals more USDCAD losses.
Read more: Forex Sentiment | Forex Technical Analysis http://www.dailyfx.com/technical_ana...#ixzz0kWOy9vpR
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I often hear new traders state that they are buying a currency pair because the price is too low or selling a currency pair because the price is too high.
The GBP/AUD lows in October of 2009 and January of 2010 were good examples. Many bought because they determined that since the market was at a 25-year low that it had to move up. If you look at a daily chart of this pair you can see where there was a nice bounce up off of those lows.
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"EU Finance Chiefs Tell Greece to Brace for IMF Bailout Terms" http://www.businessweek.com/news/201...out-terms.html
Greek 10-year yields increased to 7.255 percent today, approaching the rate before the 45 billion-euro ($61 billion) rescue package for the cash-strapped nation was unveiled on April 11.
The USDJPY has slid lower and former resistance at 9200 is now in focus. Bigger picture, I remain bullish against 9100 in anticipation of a move above 9480.
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DislikedEUR/USD
Market direction seems to be undetermined at this point....Ignored
DislikedThe 91 on the USD/JPY may happen now. 92 is being tested right now. And the GS fraud charges have just spooked the markets down.Ignored
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DislikedGood Morning Jason,
I have been with FXCM since 2006 and I have tried always to trade the SSI but it is confusing sometimes to me. What is more stronger:?
1 - If SSI changed from positive to negative / negative to positive?
2 - Or if the negative or positive position grows?
This morning the report showed AUD/USD jumped from -1.04 to -1.24 giving more bullish power. And look at the morning rally.
ThanksIgnored
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