Retail Positioning - The Ultimate Contrarian Indicator

The UsdCad did trigger stops and continue down below 1.0060. The position is up 40 pips. Traders continue to add to long positions as price makes new lows.

RPM has hit 2.1 as there are 2.1 buyers for every 1 seller. New buyers likely placed stops below 1.0000. A break of that level should trigger additional downside movement as stops are taken out.

To view live RPM charts click here (http://rpmfx.blogspot.com/2010/03/advanced-live-charts.html).

To learn more about the RPM indicator and how to use it in your trading click here (http://rpmfx.blogspot.com/search/label/Education).

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I really love your thread,
but that number 3.25% was a typo, though I believe everybody understood it as such
Lietuve

UsdCad update summary: Traders continue to pick bottoms by opening new positions. Traders as a group are not however, adding to losing long positions.

When the RPM is increasing it signifies that the ratio of buyers to sellers is increasing, most likely because traders are adding to long positions. When the RPM ratio is flat it signifies that the ratio of buyers/seller is also flat.

In this case, a leveling out of the RPM indicator most likely signifies that traders are going long at bottoms, placing stops close to entries, being stopped out as price goes lower, and re-entering at new lows. This would not affect the buyer/seller ratio and make the RPM flat.

Stops still expected lower and where there are stops, there are profits for bigger players.

Live RPM chartshere (http://rpmfx.blogspot.com/2010/03/advanced-live-charts.html).

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Thanks lietuve, I enjoy sharing it with you guys... sometimes it's good to make a mistake, you see who's really paying attention

The Chartered Institute of Purchasing and Supply (CIPS) Services Purchasing Manager's Index (PMI) measures the activity level of purchasing managers in the services sector, with a reading above 50 indicating expansion.

A rising trend has a positive effect on the nation's currency. To produce the index, purchasing managers are surveyed on a number of subjects including employment, production, new orders, supplier deliveries, and inventories.

Forecast: 58.2

A positive deviation of 2.4 should move the GBPUSD +20 to 50 pips
A negative deviation of 2.4 should move the GBPUSD -20 to 50 pips

A 100% retracement is common in the following 3 hours. This entry should be good for 100% of the initial reaction.

Retail positioning stands at -1.5 as there are 1.5 sellers for every 1 buyer.

The retail positioning ratio signifies that if there is a + deviation > 2.4 and price breaks 1.5290 stops will be hit and price will continue higher.

To get this and future RPM News updates sent to your email, join our RPMFx News Group here (http://rpmfx.blogspot.com/search/label/Forex%20News%20Trading%20Strategy).

The AudUsd has been bought heavily in the Asian and UK sessions.

If price breaks .9240 stops should be triggered and the price should continue much lower.
The Herd meter (RPM) has gone from 1 to 1.57, showing there are now 1.57 buyers for every seller. These latest buyers will most likely have stops resting below .9245

Fundamental Support?
TimesOnline - http://bit.ly/aVqGOv

“Copper traders spooked by stockpiles
Predictions of a price collapse imply that the Chinese will suddenly stop wanting homes with fridges and air conditioning units.”

Watch copper prices as well for confirmation of downward trend in AUD.

Live herding charts. http://rpmfx.blogspot.com/2010/03/advanced-live-charts.htm

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Measures the value of sales at the retail level. A rising trend has a positive effect on the nation's currency because Retail Sales make up a large portion of consumer spending, which is a major driver of the economy and has a sizable impact on GDP. Traders pay close attention to Retail Sales because it is usually the first significant indicator of the month that relates to consumer behavior and is susceptible to surprises. Core Retail Sales excludes gasoline, auto dealers and workshops.

Forecast: Core .4

A deviation of 1 should move the market 30 to 60 pips

A 78% retracement is common in the following 15 minutes. If no conflicts this entry should be good for 78% of the initial reaction.

Retail positioning stands at 1.1 as there are 1.1 buyers for every 1 seller.
The retail positioning ratio signifies that if there is a - deviation > 1 and price breaks .7019 stops will be hit and price will continue lower.

Warning: Due to low liquidity at the time of this release spreads can be > 15 pips on interbank platforms

Side Note: There is a golden cross (crossing of 50 ma and 200 ma) imminent on NzdUsd and near on AudUsd

Live news setups email to you from RPMFx.

The Consumer Price Index (CPI) measures the rate of inflation (i.e., the rate of price changes) experienced by consumers when purchasing goods and services. A rising trend has a positive effect on the nation's currency. The primary objective of the central bank is to achieve price stability; when inflation rises above an annualized rate of approximately 2%, they will respond by raising interest rates to bring prices down.

Y/Y Forecast: 3.1

A deviation of .3 should move the market 20 to 30 pips
A deviation of .5 should move the market 30 to 50 pips

A 50% retracement is common in the following 30 minutes. If no conflicts this entry should be good for 100% of the initial reaction.

Retail positioning stands at -1.1 as there are 1.1 sellers for every 1 buyer.
This is a relatively flat level and represents no immediate opportunity.

Video:
RPM Trading Strategy - How to Profit from Stop Hunters (http://www.youtube.com/watch?v=i37RMgNurDU)

Trading Tool:
Visual Trader (http://rpmfx.blogspot.com/2010/03/visual-trader.html)- Set Alerts and Trade from the Charts in Metatarader; Hides your orders from unscrupulous brokers

The PDF Your Metatrader Broker Doesn't want you to see:
Shocking Evidence of Market Manipulation built into MT backend (http://rpmfx.blogspot.com/2010/04/shocking-evidence-metatrader-brokers.html)

Measures the mood of consumers in regard to economic conditions. The
reading is derived from a monthly survey that asks respondents to
evaluate the prospects for the economy in the future. Higher readings
point to higher consumer optimism. When consumers are optimistic they
tend to purchase more goods and services, which stimulates the
economy.

Forecast: 53.5

A deviation of 6 should move the UsdJpy 20 to 35 pips
A deviation of 12 should move the UsdJpy 35 to 65 pips


A 50% retracement is common in the following 3 hours. If no conflicts
this entry should be good for 100% of the initial reaction.
Retail positioning for the UsdJpy stands at 1.7 as there are 1.7
buyers for every 1 seller. There is more potential for a move down
given this positioning.

The U.S. Gross Domestic Product (GDP) measures the total value of all goods and services producedby the economy. A rising trend has a positive effect on the nation's currency. GDP is the broadest measure of activity and the primary gauge of the economy's health. To foreign investors, a strong economy is viewed favorably because it spurs investment opportunities in the domestic stock and bond markets. More importantly, the central bank is more likely to raise interest rates in the face of a strong and growing economy.

The Advance release is the earliest and thus tends to have the most impact.

The annualized Q/Q forecast is 3.4%

A deviation of 0.5 should move the market 20 to 40 pips
A deviation of 0.8 should move the market 40 to 90 pips

A 50%-100% retracement is common anywhere from 5minutes to 1-2 hours after the release and in the last 6 months has been very risky to trade the bounce for anything more than 10-20 pips.

The retail positioning (RPM) ratio on USDJPY is at 1.7 showing there are 1.7 buyers for every seller. The RPM is a contrarian indicator. There is some downside risk on a negative deviation.

This has been fairly consistent level throughout this week.

For live retail positioning information click here (http://rpmfx.blogspot.com/2010/03/advanced-live-charts.html).
For 60 Second video on how to trade Retail Positioning click here (http://rpmfx.blogspot.com/2010/04/videos.html).
To get news alerts by email click here. (http://rpmfx.blogspot.com/2010/01/rpmfxnews-prenews-setups-emailed-to-you.html)

The Institute of Supply Management (ISM) Manufacturing Index measures the activity level of purchasing managers in the manufacturing sector, with a reading above 50 indicating expansion. A rising trend has a positive effect on the nation's currency. To produce the index, purchasing managers are surveyed on a number of subjects including employment, production, new orders, supplier deliveries, and inventories. The UsdJpy should be the benefactor of a + deviation.

Consensus 60

A deviation of 3.8 should move the market 40 to 90 pips
A deviation of 2.8 should move the market 30 to 50 pips

A 100% retracement is possible in the following 1 hour. If no conflicts this entry should be good for 100% of the initial reaction.

Retail positioning stands at 1.6 as there are 1.6 buyers for every 1 seller.

The retail positioning ratio signifies that if there is a - deviation > 3.4 and price breaks 93.70 stops will be hit and price will continue lower. Retail positioning has been fairly steady in the last week.

For live retail positioning information click here (http://rpmfx.blogspot.com/2010/03/advanced-live-charts.html).
For 60 Second video on how to trade Retail Positioning click here (http://rpmfx.blogspot.com/2010/04/videos.html).
To get news alerts by email click here (http://rpmfx.blogspot.com/2010/01/rpmfxnews-prenews-setups-emailed-to-you.html).

The Chartered Institute of Purchasing and Supply (CIPS) Manufacturing Purchasing Manager's Index (PMI) measures the activity level of purchasing managers in the manufacturing sector, with a reading above 50 indicating expansion. A rising trend has a positive effect on the nation's currency. To produce the index, purchasing managers are surveyed on a number of subjects including employment, production, new orders, supplier deliveries, and inventories. Traders watch these surveys closely because purchasing managers, by virtue of their jobs, have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.

Forecast 57.5

A deviation of 4 should move the market 30 to 50 pips
A deviation of 3 should move the market 20 to 30 pips

A 100% retracement is common. However there is no pattern in the after spikes.

Retail positioning is flat.

Article Links: here (http://tinyurl.com/24jjq3n)
Manufacturing gauge expands rapidly in April (sfgate.com)
UK manufacturing confidence at 15-year high (newstatesman.com)
Survey: China Manufacturing Accelerated in April (abcnews.go.com)

Measures the change in number of employed people during the previous month, excluding the farming industry. ADP, a leading provider of employment solutions for businesses, releases this indicator two days before the official Bureau of Labor Statistics (BLS) employment report. While the indicator has only been in existence since early 2007, it's shown some predictive value in regard to the BLS report.

Forecast: 27.5

A deviation of 90 should move the market 70+ pips
A deviation of 50 should move the market 30 to 70 pips

A 100% retracement is common in the following 3 hours. If no conflicts this entry should be good for 100% of the initial reaction.

Retail positioning stands at 1.6 as there are 1.6 buyers for every 1 seller.
The retail positioning ratio signifies that if there is a – deviation > 50 and price breaks 94.15 stops will be hit and price will continue lower.
Our research shows ADP has been a good predictor of NFP:
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I posted this just yesterday evening in the blog here (http://rpmfx.blogspot.com/search/label/GBPUSD). The daily chart had a complex corrective 4th wave and showed smaller degree waves suggestion the commencement of a larger 5th wave down.


It has since pulled back in a smaller degree correction as predicted to around 100 pips of profit.

As seen in a small bump in the RPM (2nd chart), buyers came in near the bottom of yellow 1.

Although I don’t generally put weight on wave counts less 1 hr levels, this 1st chart below illustrates this pullback and where it may go from here short term.

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RPM, I have been following your blog and work. Very impressive, keep it up.

I've actually seen Jamie Saettele's presentation at the NY Trader's workshop on this type of thing. Very compelling. I have in mind to develop some robust tools on sentiment.

I'm curious however about something. Are you just piping in the SSI data from FXCM?

It's mentally tough to buy/sell a breakout, but if you know that there are a ton of buy or sell orders placed there previously, you know that their stops lie right beyond the high/low.

With this information you can predict the breakout and feel confident entering.

It also shows you how to be a TRUE CONTRARIAN. To be a contrarian you must go against the HERD not the TREND. The RPM shows you where the herd is.

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Thanks Eig!

The data comes from several large sources that are feed into a sentiment algorithm I've created and then fed to the charts. I'm working on making this info avail to other traders on their own platforms. Sign up at the blog if your interested in the indicator, it will be avail to traders by order of signup.

Nice to hear some feedback, sometimes it seems I'm posting to a wall - ha. I feel like I'm screaming at dirt. It's quite sad watching these charts sometimes, because I can SEE where Retailers are getting HOSED!

People say there is no such thing as stop hunting! Ha! If you knew where other peoples orders were (especially stops), tell me you wouldn't use that info!

It's like playing chess and they can see your moves, but you can't see theirs.

I say it's time we open the whole damn board!

Why do you think 90% of traders lose their ass after 6 months! Trust me these guys are not smarter then you or I. They can see the whole board and we are left guessing.

NOT ANYMORE!

Use the RPM people!!! See what they SEE!

I definitely see large potential in this and have always wanted to utilize retail positioning in my systems.

I have indeed already signed up on the blog and would love to work with you on some things. I'll send you a mail.

EDIT: looks like I cant send email yet on the forum. I've emailed you, you should see an email from [email protected]

Very interesting point you have laid out for us qtmspin. Will absolute look through this.Thanks

-PipFellas-