Sentiment in forex

[StockyGuy]

How do forexers use sentiment, in the sense of retail sentiment (longs vs shorts on a currency pair)? Some say always best to have a contrary position - ie, if most retail holders are short a pair, it's best to go long, and vice versa. Reason being obvious - most retail forex traders lose.

In reality it's a dark and dangerous forest to wander, sometimes aligning with strong retail trader sentiment can be most profitable due to inherent nimbleness of small traders versus institutional and "big boys". To complicate it more I've heard suggestions that the big end of town who own many of the bodies giving the sentiment information might manipulate the figures to sow confusion and apprehension. (Sounds rather doubtful, but, like MM stop hunting, I can't completely discount the possibility.)

 

[cogs]

As a general rule, and from my experience I believe paragraph one to be 75% correct. The problem is that it isn't precise, and yes it is now largely used against the heard.

By the time any edge (if you want to call it that) reaches general topics of conversation in main stream public forums etc. you can count on it has already been milked to death by the cartel against retailers.

A very clear example of how trading doesn't work with or against sentiment is eurgbp, gbpusd and eurusd anymore where retailers have been short eurgbp for months now and they just keep pushing it up (or gbp fighting for the bottom more accurately). Retailers have been overwhelmingly long on eurusd for some time now trying to pick the bottom.

Any sort of edge in forex has a very short life span. Forex is for large players only. What makes discussions like this even more confusing for the unaware, is well paid broker shills trolling forums with misinformation keeping old school phased out methodology alive. Make no mistake in forex the retail is a highly lucrative market for the cartel and large ventures.