Retail trader sentiment is my favorite tool when it comes to trading Forex. I’ve spoken about this in my live webinars and in my DailyFX articles. Our Speculative Sentiment Index (SSI) gives us a ratio of how many FXCM retail traders are currently long and short each major currency pair and we generally try to take the trade opposite of the majority. The logic is that most retail traders lose money by trying to pick tops and bottoms with countertrend trades. So if we take trades that oppose this group of retail traders, in the long run we could see an advantage.
To take SSI one step further, DailyFX.com has created trading signals that follow these principals with clear buy and sell signals. The screenshot below shows an example of how the trading signals are displayed on DailyFX Plus.
Learn Forex: DailyFX Plus Trading Signals Using SSI
Each signal tells us the time the signal was given with an entry price range we should look to receive. If the current price is still within the given range, the signal is still valid to trade. If the price has moved outside of the entry price range, we most likely missed the opportunity. Each trade also has managing orders we can attach to our trade to manage it properly (stops/limits).
There is a login required to access these trading signals. The first way you can get a login is by having a FXCM real-money trading account. Your login would simply be your account number in that case. The second way you can access these signals is by becoming a monthly subscriber @ $19.99/mo. Once you log in, you will also have access to receive these trading signals by E-mail or SMS alerts.
There is also a way we can automate these signals so that they are placed on our account automatically. For more information on automating using SSI, check out FXCM’s Mirror Trader platform. You can register for an automated demo account here.
—Written by Rob Pasche
To contact Rob, email rpasche@dailyfx.com.
Trading Sentiment Using DailyFX?s Trading Signals
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