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Basic - trading extreme positioning

  • #21
  • Jun 29, 2014 1:55pm Jun 29, 2014 1:55pm
Quoting srt
{quote} Even if you have reliable data where most of the participants are included, I still find the information hard to trade from. Currencies are a bit difficult to test because the markets (forex, futures, etc) aren't centralized but look at the COT reports for markets that are more centralized such as livestock, grains, softs, etc... Most participants are using the futures market so 1 centralized market where you can see the positions of large traders (commercials, funds, etc) looking @ the weekly COT reports. I've reviewed the historical charts...
Theoretically anything is arguable or deniable. As much as I understand, the thread owner uses this approach in real trading with success. So, he knows best
And, of course, only small traders commitment matters. They are the losers in the market.
  • #22
  • Jun 29, 2014 2:02pm Jun 29, 2014 2:02pm
Quoting 5abi
The market will go where it causes most pain to most people. Understand what your are saying. But i am not talking about institutions and market makers. My approach is different in the sense that my brokers positioning, or Forex Factory positioning is mostly retail traders. I use this information to gauge the likelihood of a major s/r level to hold or break. As an example, lets us say 91 % of the traders are long USDJPY and price is at key support level 101.50. If the level breaks, it most likely trade lower. {quote}
Exactly! By the way, are there any free resources available for COT or SSI data that we could use instead of FF?
  • #23
  • Jun 29, 2014 2:08pm Jun 29, 2014 2:08pm
Quoting Indrek
{quote} Exactly! By the way, are there any free resources available for COT or SSI data that we could use instead of FF?

Check these out Indrek - All these reinforce my belief that USD, EUR weaker, CAD/AUD/NZD/JPY stronger.

http://www.dukascopy.com/swiss/engli...tch/sentiment/

http://fxtrade.oanda.com/analysis/co...nts-of-traders
Its all in the mind.
  • #24
  • Jun 29, 2014 2:11pm Jun 29, 2014 2:11pm
Quoting 5abi
{quote} Check these out Indrek - All these reinforce my belief that USD, EUR weaker, CAD/AUD/NZD/JPY stronger. http://www.dukascopy.com/swiss/engli...tch/sentiment/ http://fxtrade.oanda.com/analysis/co...nts-of-traders
Thanks! One important question: what level do you consider extreme enough?
  • #25
  • Jun 29, 2014 2:11pm Jun 29, 2014 2:11pm
Quoting Indrek
{quote} Exactly! By the way, are there any free resources available for COT or SSI data that we could use instead of FF?

You can get the information directly from CFTC in a numbers-only report (http://www.cftc.gov/MarketReports/CommitmentsOfTraders/Index.htm) or on the bottom of a chart at several different websites (http://www.barchart.com/futures/cot.php).
  • #26
  • Jun 29, 2014 2:15pm Jun 29, 2014 2:15pm
Quoting 5abi
The market will go where it causes most pain to most people. Understand what your are saying. But i am not talking about institutions and market makers. My approach is different in the sense that my brokers positioning, or Forex Factory positioning is mostly retail traders. I use this information to gauge the likelihood of a major s/r level to hold or break. As an example, lets us say 91 % of the traders are long USDJPY and price is at key support level 101.50. If the level breaks, it most likely trade lower. {quote}

Yes, I understand you're method is based upon retail positions. I was just responding to a comment "But trading based on positioning by some hundreds of traders is not safe." I just wanted to show that even if you had information of the larger traders, would that really help with your trading? I can't see how it would but maybe for some it does.
  • #27
  • Jun 29, 2014 2:16pm Jun 29, 2014 2:16pm
A ratio of 80:20 is fairly lopsided. But some of the best set ups I have at 90:10.

Quoting Indrek
{quote} Thanks! One important question: what level do you consider extreme enough?
Its all in the mind.
  • #28
  • Edited 2:37pm Jun 29, 2014 2:22pm | Edited 2:37pm
CFTC reports look messy, besides the data is being updated every Friday and shows the situation by Tuesday before that. So, the numbers are pretty old for taking trading decisions. SWFX approach seems better but no idea how many traders or lots have been included...
  • #29
  • Jun 29, 2014 2:25pm Jun 29, 2014 2:25pm
Quoting srt
{quote} Yes, I understand you're method is based upon retail positions. I was just responding to a comment "But trading based on positioning by some hundreds of traders is not safe." I just wanted to show that even if you had information of the larger traders, would that really help with your trading? I can't see how it would but maybe for some it does.
Positioning is really order flow. In my opinion it shows the intent. I think it is helpful. Its a contrarian indicator. Anyways , it might work for some. Might not work for others. I will try and post my traders before i take them, using this approach. As I said in few posts in beginning, looking to sell Euro GBP, USDJPY, EURCAD this coming weeks.
Its all in the mind.
  • #30
  • Jun 29, 2014 2:57pm Jun 29, 2014 2:57pm
It's easy to see if it has worked in the past.
Go to Trades and look at daily position charts for each of the pairs.
Se if an extreme unbalance preceded a break out.
  • #31
  • Edited 3:44pm Jun 29, 2014 3:30pm | Edited 3:44pm
Quoting billbss
It's easy to see if it has worked in the past. Go to Trades and look at daily position charts for each of the pairs. Se if an extreme unbalance preceded a break out.
Thanks.
Interesting & a bit surprising. Retailers have been pretty good according to the brief backtesting I just did. NOT on the wrong side @ extremes.
Attached Image(s) (click to enlarge)
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  • #32
  • Edited 4:05pm Jun 29, 2014 3:49pm | Edited 4:05pm
Quoting srt
{quote} Thanks. Interesting & a bit surprising. Retailers have been pretty good according to the brief backtesting I just did. NOT on the wrong side @ extremes. {image} {image}
I think, only a small number of very best traders in FF show their live account data through Trade Explorer. And they certainly do not represent the retail market.
Have to forward test with Oanda, for example. They refresh the sentiment numbers every 20 minutes: http://fxtrade.oanda.com/analysis/open-position-ratios.
And why not comparing it with Alpari: http://www.alpari.co.uk/newsroom/cat...ical-analysis/ and Dukascopy that was referred before.
Let us see first, if GBPUSD will go up from now. Basically, all sentiment numbers suggest it.
  • #33
  • Jun 29, 2014 3:53pm Jun 29, 2014 3:53pm
Quoting Indrek
{quote} I think, only a small number of very best traders in FF show their live account data through Trade Explorer. And they certainly do not represent the retail market.
Agree 100%.
But if the method of this thread uses those numbers then I'm not sure it's such a good idea to be counter to those positions based upon historical results. I didn't do enough checking though to get enough of a pattern.
  • #34
  • Jun 29, 2014 3:58pm Jun 29, 2014 3:58pm
This still gives you enough opportunities to make money against these traders. Remember it does not turn around on a dime. These transitions in trends take time, and if you are careful with where you place your orders you have an edge against the majority.


Quoting srt
{quote} Thanks. Interesting & a bit surprising. Retailers have been pretty good according to the brief backtesting I just did. NOT on the wrong side @ extremes. {image} {image}
Its all in the mind.
  • #35
  • Jun 29, 2014 4:17pm Jun 29, 2014 4:17pm
Quoting srt
{quote} Agree 100%. But if the method of this thread uses those numbers then I'm not sure it's such a good idea to be counter to those positions based upon historical results. I didn't do enough checking though to get enough of a pattern.
My suggestion for now is to monitor Oanda, Dukascopy and Alpari. If a pair is 80% long or short on one of these and at least 70% on others, then it is good for trade.
Right now we have long GBPUSD and short EURCHF.
  • #36
  • Jun 29, 2014 4:19pm Jun 29, 2014 4:19pm
wish u good luck

stat will show if this works.

  • #37
  • Jun 29, 2014 4:29pm Jun 29, 2014 4:29pm
Quoting 5abi
This still gives you enough opportunities to make money against these traders. Remember it does not turn around on a dime. These transitions in trends take time, and if you are careful with where you place your orders you have an edge against the majority. {quote}
Yeah, no reason to change your method if it's working for you. So far nice track record.
  • #38
  • Edited Jun 30, 2014 2:17am Jun 29, 2014 4:39pm | Edited Jun 30, 2014 2:17am
Quoting srt
{quote} Yeah, no reason to change your method if it's working for you. So far nice track record.
He said from very beginning that he himself is using other data, too. The method stays same, no matter what data anyone uses. Key is when and where you set the pending orders (at least 80% sentiment, and 0,25%-0,5%-1% under/above current level).
  • #39
  • Jun 29, 2014 7:57pm Jun 29, 2014 7:57pm
Yeah, you see what's a happening in USDJPY. 101 beckons.


Quoting srt
{quote} Yeah, no reason to change your method if it's working for you. So far nice track record.
Its all in the mind.
  • #40
  • Jun 29, 2014 8:02pm Jun 29, 2014 8:02pm
USDCAD has also been moving according to your system.
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