Alan Solarsh shows how MyFXBook sentiment tracks retail forex positioning across gold, EUR/NZD, and other pairs. Retail traders are often wrong: gold hit 61% short while price rallied, and extreme readings above 80% frequently precede reversals. He combines sentiment with an 8-period EMA and a second candle rule rather than trading it alone.
Questions this video answers
61% short.
Around 80–85% (and up to 95% in extreme cases).
95% long.
About 90%.
Nine years.
Chapters
This video tutorial explains to you myfixbook and how to make it work for you. So I've already posted a video on how to set up your MyFix book and how to get the statistics of your account. So MyFixbook has got an application that you can install on your computer. It's a Chrome app, a Chrome extension, and you can use it to start analyzing what the markets are doing. So, so this is my perspective and this is how I see it, and it's only my opinion. MyFXBook is one of the largest aggregators of forex data in the forex industry. So what that means is that most forex traders, retail Forex traders, use MyFXBook so that they can get a graphical user interface of what their account looks like. I prefer to use FX Blue, as you know, because I find that it gives me more accurate irr internal rate of return rather than an roi. Traders like us, what they do is that they open an account and they connect their forex account to MyFXbook. Now, most forex traders, I'd say about 90% of forex traders out there are using robots. And how I come to that assessment is through the sentiment and the outlook. So on MyFXbook, on the phone, I think when you install it on your phone, you immediately come to this page over here. So when you click on the hamburger lines in the top left hand corner, you get to what is called the outlook. I've set mine up to give me the outlook of the, the pairs that I'm interested in. The same as this outlook over here, it's called sentiment. On the website, when you click on sentiment, you get here and you get to what is called the sentiment. Now if you, if we scroll down to gold and you mouse over it, you'll see what the sentiment is. Now if we look at the phone at the same time, this is very interesting information. So, so let's go to the phone and let's look at the chart for gold, all right, because that's what we're discussing. Now as you can see, gold is very much long. And if we look at the sentiment of gold, it says there that retail traders are 61% short. So how is this data accumulated and how is this data analyzed by my fixed book? So they, all the retail traders us are, are connecting our forex accounts to this aggregator. The data is automatically uploaded to the MyFixbook servers and then MyFixbook takes that data and they spit out the information of what the retail traders are doing. And as you can see 61% of retail traders using MyFixbook or 61% short. Now the question is why are they short when the market is long? Why are the retail traders trading against the trend? The only analysis I can come up with is that they are using either Martingale or grid types TRA trading strategies which is exactly what we're using. So our strategy, our robot is a dollar cost averaging hedging, scalping robot. But it, it, when the trend goes against you, what it does is a dollar cost averages so it places trades in the opposite direction of the trend waiting for a reversal. When there's a reversal, the robot will take profits. And this is what I think most of my fixbooks customers clientele is doing. They're using the same type of robot or similar type strategy that we are using. So it would be obvious then to say that most retailers, retail traders have the same sort of positions that we have open. And as you can see we are 61% short and only 39% of retail traders are, are long. Which is very, very interesting. And so it sort of gives us an indication of what's happening in the marketplace. Now what I found is, is that when the number, whichever position you're looking at gets to about 80%, 80 to 85% we can expect a reversal. And then the banks normally take a position in the opposite direction and.
The price is then reversed. So this is why on the, on the 8 exponential moving average indicator I have put there the sentiment over here for you so that you can make better educated decisions. So if we open up another chart. So let me just add the, the temp, the Allen charts template and then let me add the 8 indicator back back again to the chart so that you can actually see that. So if we click on Euro NZD we can see exactly what's happening. So you can see the price is actually north. But the sentiment, most retail traders have got sell positions that they've taken because of the I think the EAs that they're using. So we can expect a turn in the, in the pair the same as CHF January jpy. So if we click it you can see most retail traders are long and yeah, you can see it's actually gone short over here on the last couple of days. So it may have reversed. It's very, very interesting. So we, I know using my strategy that when the second candle opens below the 8 exponential moving average you can expect a short. So let's just take one more. So here's 95 long on NZD CAD. So let's just analyze it. So it's 95 long. Most retail traders are long, but yet the price is going short. Okay. The banks are moving this, the, the currency short. So it also tells you that we, we don't feature in the market. Okay. Whatever we're doing is not, it's got no consequence on the market. The market is controlled by the institutions. So you need to watch this very, very carefully and trade in the direction of the, of the currency or the pair that you're trading. Now on that note, my robot does trade against the currency, but it's got a nine year track record of success. So it's just a better technology in my opinion. So that's how MyFixbook works and that's how the sentiment works. So the, the summary is, is that when the pro, when the sentiment gets to about 80, 85 to 95%, you can expect the banks to make a move and the price is set for a reversal. Okay. So it doesn't mean to start taking long positions. We still wait for the second candle to open above or below the atma to make a trading decision. But it's up to you what you do. That's just how I trade. I don't trade based on the sentiment. I just watch it so I can see exactly what's happening. So I hope that you found this video interesting and I'll see you on my next video.
