Hello!

Does anyone use the SWFX Sentiment Index? https://www.dukascopy.com/swiss/english/ ... sentiment/

'Liquidity providers... The sentiment ratio of this group is opposite to liquidity consumers’ data because, for each trade executed through SWFX, there are two equal and offsetting over-the-counter transactions.'

Does this mean that there are two opposing trades by the providers? And if so why is it just the opposite of the Consumers data, shouldn't it be twice the amount?

Lastly if you use it the index as a guide would you be more interested in trading with the sentiment of the providers or consumers... (running with or against the herd etc)...?

If its useless info please tell me and I'll stop watching it

Many thanks and happy trading!

I wrote an article last month about the sentiment index. I am not sure if I am allowed to post a link to pimp my old articles here so I'll just give you the name of it. Retail Positioning- The Scary Uncle in the Room. I use it quite extensively, and love it. You can email my account if you have further questions or chat through comments if you want.

hi ikhall and thanks for the reply!

very interesting article

I have noticed that the sentiment index can be fairly accurate but it lags somewhat... as in the retail crowd get short or long too early and then get squeezed before the move...

I have some questions so will get in touch,

all the best.

Hi ikhall,

I do not agree with your enthusiasm regarding this contra indicator.
The GBP has been falling since the past week and your mentionend indicator is showing that the consumers are 73% short!
With that amount of retailers being short the GBP should have strenghened against the dollar if this sentiment index would be an efficient tool.

Have a look at the GBP-USD chart below:






Looking forward to your reply.

Burton

I didn't read the article, but what is useful in this indicator is not only
the net positioning of the retail crowd but the shift in sentiment from a side to an other.

Like other indicators it's far from 100% accurate but at least it can give you some
caution in jumping blindly in shorting your GBPUSD example. The much traders you
have on the same side the more likely momentum will slowdown because traders will take profit
at the first evidence of a reversal.

In ranging markets, retail trader are often on the "good" side. Otherwise, the crowd is
mostly betting against the trend.

Best regards

I have tested this and noticed that it can actually prove to give good guidance on the mid-term weekly basis only, not intraday / shortterm.