Last month, April, was wonderful for me because I made excellent EUR/USD position gain. I am short time trader. Long trade setup can be created only using detail analysis. In this article I will try to show you my strategy and several steps which we can use in analysis process. The best approach is to use several analysis and different angles as we can see in Diagram. Fundamental analysis will be not part of this article.
Diagram : EUR/USD analysis
2.0 SWFX Sentiment Index analysis
Dukascopy SWFX Sentiment Index show long and short ratio for major forex pairs. On one side we have liquidity consumers (non banks traders such as brokers and individual clients) and on the other liquidity providers (banks and centralized marketplaces). In my opinion, liquidity consumers are mostly on right side. They follow major trend. Consumers (short time traders) very often "sell into rallies and buy into declines" and they follow short time trend. In Figure 1 we can see current Consumer SWFX Sentiment Index and in Figure 2 we can see current SWFX Providers Sentiment Index.
Figure 1: Consumers -SWFX Sentiment Index analysis
Figure 2: Providers -SW…