Good day forex traders.
It is a commonly known fact that many retail forex traders usually fail in their trades in their attempts to make money fast in forex. This has lead to schools of thoughts regarding trading against this group of traders. This is also known as contrarian trading or anti retail forex trading. In short, the idea is to bet against these retail traders.
Let us take a look at the current sentiments now and we have improved on our review by adding the sentiment information from another broker!
Source: DUKASCOPY / OANDA
Based on the information above, the following contrarian trading positions may be a possibility. Positions are based on DUKASCOPY / OANDA respectively.
EUR/USD : neutral / neutral
GBP/USD : buy / buy
USD/JPY : strong sell / strong sell
USD/CHF : sell / weak sell
EUR/JPY : sell / neutral
GBP/JPY : weak sell / weak buy
Area of interest to note :
GBP/USD has fallen to a double buy contrarian signal. From a technical point of view, the daily GBP/USD chart continues to be plagued by bearish corrections.
EUR/USD has dropped into a double neutral contrarian signal and this suggests no definite directions. With the recent problems affecting the euro zone and a weaker US economic growth, a period of uncertainty may indeed be coming.
USD/JPY has a double strong sell contrarian signal and this means many retail forex traders are long for this currency pair. Having said so a look at the USD/JPY chart shows an obvious bearish trend for the daily chart. Perhaps speculations are high on a possible bottom.
An interesting observation to note is that GBP/JPY shows conflicting contrarian signals. This may be a result of a lack of volume hence resulting in an insufficient sample size to produce consistent signals.
Do be cautioned that this is not ” one trading signal to rule them all “. Rather the Forex Traders Sentiment Index may be used as a possible confirmation for the trading signals generated by your personal analysis. Furthermore this is only a representation from DUKASCOPY and OANDA and hence may not reflect the entire forex market sentiment.
Folks i started a new forum for us to discuss about forex and i hope everyone joins! It is brand new and hence i will be looking for active helpful folks to join and be possible moderators.
Related Forex Articles from the Koala Forex Training College.