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Retail SENTIMENT USING THE PLATFORM MYFXBOOK - part 1

January

Monday

January

01

1999

at

10:00 AM

(timezone)


Welcome to another blog post.

In this post, I want to talk about the website called MYFXBOOK which is a veritable gold mine of information for both experienced and aspiring Foreign Exchange traders. We will consider the sentiment page of the website, and find out how it can help traders work out the direction of price.

Before traders start to get very very excited, I would suggest a period of observation and learning is necessary prior to attempting to take any trades using the information obtained from the site.

Over the last ten years, there has been an explosion of interest in the Foreign Exchange markets in general, and especially from outside of the areas one most expects. This has come about for several reasons, one of them being the hugely successful marketing campaigns undertaken by the major FX brokers, who spend hundreds of thousands, read millions of Euros/Dollars per year on expensive marketing campaigns, so that they have a steady stream of new and fresh clients coming into their brokerages.


Myfxbook sentiment


The FX market which by implication is global, with the market being run in a distributed manner from financial centres stretching from Auckland to California and passing all points in between, including Tokyo, Hong Kong, London and New York, has become international due to the players who frequent the market in the pursuit of profits. 

Within the MyFxBook sentiment page, in the depths of the positions by country pages, you will find that on occasions small African countries traders apparently hold gigantic positions in some of the less well know minor FX crosses, in fact those traders hold the majority of the positions at such times, which on the face of it this seems hardly believable, but it's the reality of the market place and shows the level of interest in todays FX markets.

In order to take things further, let’s break down the detail in which we are interested,  have a look at the categories and pages which are being presented and dive into how the available information may help us.

Tip: Losing money trading - if you prefer to invest your money, so that you  always receive a positive return, then it is probably better to put your money in a savings account at your local bank or financial institution, rather than exposing it to the market.

MYFXBOOK SENTIMENT DISSECTED

To access the site you should go to the following address, https://www.myfxbook.com or simply click on this link and a new web browser page will open up on the correct page.


MyFxBook URL

Once you have arrived on the home page of myfxbook.com Now click on the menu item sentiment and a new web browser page will open up on the correct page.


Myfxbook sentiment menu ietm

The main details of the FX pairs that are available for sentiment analysis are noted on the sentiment page and it is from this page that the trader may  progress further to request more details on the sentiment of the pair(s) of interest. 

The Sentiment Page

What is the retail trader sentiment page ?

The sentiment page and the more detailed analysis that follows describe retail FX traders past and present trading positions. From this information the trading sentiment of the traders may be established. By sentiment,  we mean whether they believe an instrument/pair will rise or fall. How bullish or bearish traders are and where they have placed their positions in relation to the overall market. Myfxbook are able to do this, as various brokers provide near real time details about the size and direction of their traders trading positions.

The information provided on the sentiment page gives traders a unique snap shot of how other traders, in this case the retail segment of traders are thinking and positioned in the market. For example you may see what pairs are  they trading and in what  is fashion. 

This information is a game changer, and if you have been trading any length of time, a light bulb should have just gone on as to what it can do for you.

MyFXBook screen shot of example sentiment page


Questions like, are the majority of retail traders long or short are answered. So can questions concerning the volume of contracts being traded long or short, this fact alone can provide the trader with some startling information about a particular pair.

For example, imagine that the retail volume of long positions for a particular pair is at multi year levels, this indicates that it the pair should be highlighted for further analyse to obtain further information on why this is the case. Jut looking at volume from your normal broker will provide you will information related to just that one broker and does not represent the overall market. 

In addition to the above,  details of the trend,  long or short , provided by trader positions when compared to the market price are also available, this is due to the near real time  collection and dissemination of data to the platform.

The data presented by MyFXbook is provided free of charge, with updates every sixty minutes. There is very little of use which is free of charge in trading so this fact should be grabbed with both hands.

A paid service is available for those that require real time information. The subscription fee is nominal, given the detail of the information provided at costs around Euro 300 per year.

Let’s take a look at the main details of the sentiment page.

Symbol

The symbol or pair is listed on the left had side of the sentiment page and it is by clicking on the pair of interest the trader is able to drill down further to look at lower level details related to the pair in question.


Myfxbook Symbol


There are entries for all of the FX Majors, FX Minors and also some of the other crosses/exotics. Traders of Gold, and I know that there are many many who absolutely adore trading Gold, due to its volatility, do not worry, the yellow metal also has an entry on these pages and is further analyzed in detail within the site.

Community Trend(Shorts v Longs)


The Community Trend (Shorts v Longs) provides information in tool bar visual form of the total number of short trades versus the number of long trades. The short trade percentage is shown in red and the long trade percentage is shown in green.

Community Trend Shorts v Longs

Symbol Popularity


Symbol popularity provides in tool bar form a visual guide per symbol the popularity of each pair, this is measured by the number of open and short positions for all pairs quoted an by calculating the most popular, the least popular and all popularities in between.

With this simple 'indicator' it is possible to see where the 'retail traders' are or where is 'the money', this in itself is a very powerful information if you happen to have it in your hand.


Symbol Popularity

Average Short Price and Distance from Price


The Average Short Price and Distance from Price is one of the most fascinating statistics available on MyFxBook and within the Sentiment page.

This figure shows, the average short entry price of traders positions whose information is being captured by their brokers and sent to MyFxBook. 

The distance from price shows just that, how far above or below price the average short entry price is when compared to the current price.

Average Short Price and Distance from

Average Long Price and Distance from Price


The Long Short Price and Distance from Price is one of the most fascinating statistics available on MyFxBook and within the Sentiment page.

This figure shows, the average long entry price of traders positions whose information is being captured. by their brokers and sent to MyFxBook. 

The distance from price shows how far above or below price the average Longt entry price is when compared to the current price. What I find very interesting is that the majority of currency symbols have both the average distance from price figures for both long and short showing as red, which means both sets of traders, longs and shorts are losing money and underwater.  This has surely to be very pertinent information which can teach traders alot about their competitors. 

Average trader long price and distance from current market price.

Recap and Webinar Replay 


In this short blog post I have high lighted the initial details of what is available on the sentiment page, the next step will be to look at the detail of each of the above categories and describe how we can use each of them to our advantage. I will do this in a separate blog post.

Before we do this please, take a look at this recorded webinar presentation which covers the introduction to the subject in video form and covers the above and more detail on interpretation.

Use for viewers to know:

CFTFC - Commodities Futures Trading Commission

COT - Commitment of Traders Report(Provides similar information to that held on myfxbook, but relates only to the Futures markets)


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