does any look at client sentiment on ig as a tool to trade?
g'day tkb
not with ig, am using cmc
i use the sentiment as an extreme counter-intuitive tool
like any tool best applied with repeatable context
in other words does it fit the picture(?)
when price is trending we expect to see more players and more capital in the direction of the trend
...this is very rare
we should expect to see more players as a % of both positional and capital placed
these are two different things, amount of player in total divided by 2 and amount of capital placed divided by 2
and relative to two groups: all-retail and top-clients
lets say we have a clean turn from an upleg to a downleg,
at that turn the liquidity is around 60% positions and 60% capital (in both groups, which are usually in the same ball park % wise)
- theyre Buy To Open (that means 40% of players are Sell To Open with 40% of available capital in STO positions)
after a couple of days of strong distribution, pricing south, the bargain hunters are out
all-retail is now 80% BTO with 75% of the available cap in BTO positions
we can say this is typical bargain hunting based on the prior larger direction (up)
top-clients are less enamoured
theyre more likely to reflect why theyre in the "top-clients" list
theyre more likely to be 70% BTO with 65% available cap in BTO positions
both groups are on the wrong side, the trend south has only just begun, theyre buying the ever-giving discount
what %, of both groups, are with the price that's printing?
in this instance, the % of players who are with the price that's printing:
20% of all-retail are in STO positions with 25% of the available cap in STO positions
top-clients have a total number, as a % of players, at 30% in STO postions with 35% available cap in STO position
those players are on the right side of the trade
it's not important that its the same players (we dont know whom they are...)
what is important is the constant driving % on either side of the trade
this is an art and a (not exact) science, rather this is an inferrence of bias (by them) observable (by you)
and needs to be constantly given context of when-n-where and by-how-much for how long
all you can do is infer what the other players are doing and what "should" happen next (in the confines of the time bars)
the sentiment for extremes might just stop you from being purposefully dimwitted if nothing else
the extent of which sentiment in a cfd platform is useful can not be clearly defined as there are not
enough parametres for definitive colour by numbers employ
however, if you take the time to watch the wash and notate where n when and in context of trending or coiling or distribution/accumulation zones, then, with time frame as the main consideration, you may find them useful, in the least,
to hint that if everyones one side of the boat when price is printing the opposite way and youre with that group,
you might consider who's on the other side of your trade
there's a lot more to this, sure....... if it merely aids you in not having dimwittery, when employed correctly,
it's a useful tool
...to stop you from becoming a biased useful tool yourself