Our sentiment page displays the overall long and short positions of the Vantage FX book. The sentiment ratio of long to short positions are represented as a percentage and displayed as a sliding scale where red represents our clients’ shorts and blue represents their longs.
Sentiment analysis is another tool that forex traders can use to make trading decisions, adding it to their standard arsenal of fundamental and technical analysis. It works side by side with these methods of analysis by helping to alert you of any supply/demand imbalances which could lead to potential reversals in price.
Think about this as an example: You take a look at our sentiment indicator for EUR/USD and you see that 95% of the book is currently holding a long position. You know that this 95% have to sell to close their trade so now ask yourself, how many more buyers do you think remain? It’s this sort of supply/demand imbalance that presents a trading opportunity to short with the idea of getting in early before the 95% have to close their longs.
Just be aware that as forex is a decentralised market, our sentiment readings are of the Vantage FX book only. By reading this snapshot of the market however, you can get an idea of the average trader’s mindset and therefore take advantage of the supply/demand imbalances that may result.
*Sentiment data is from VGL client positions
Being a specialist ECN forex broker, clients of Vantage FX trade forex in a larger volume than any other asset class. This means that the sentiment readings on forex currency pairs are going to contain the most data at any one time and therefore will prove to be the most reliable snapshot of the average trader’s positional mentally.
We have featured the following 8 forex currency pairs because they represent not only those that are most popular, but also because they offer a wide view of the global currency trading spectrum.
Our final set of sentiment readings are those of the indices markets. We’ve chosen to feature the biggest, most liquid indices from each corner of the globe and as a result, represents enough trading volume to help you make an informed sentiment related decision.
We encourage you to do some of your own research on the global trading volumes that run through these various stock exchange markets, so you can make an informed decision around just how much weight you should apply to sentiment over technical or fundamental analysis.
Only the world’s most liquid stock exchange indices on the Vantage FX book have been featured. Take advantage below.
The next set of sentiment readings that we have featured are our biggest commodities markets. While the trading volume may not be as widespread across a large number of commodities, the popular ones garner some quite literally, huge volumes. High trading volumes in Gold, Silver and Oil are naturally to be expected, but even after blowing off its highs, you may be surprised to hear that Copper volumes are actually not too far behind the big 3.
Known for their trending personalities, sentiment across commodities markets can get stretched quite quickly.An opportunity that can be taken advantage of via sentiment analysis.
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