Mikemachuma31
New Member
Traders can look to sentiment at the very start of the analysis process or they can conduct thorough technical and/ or fundamental analysis and seek out client sentiment as confirmation of the trade.
Using client sentiment as the starting point however, can be extremely useful as it can inform which market to trade and in what direction, before any other analysis is even done. Thereafter, traders can use technical analysis to spot ideal entry and exit points for that market.
Establishing the market and direction: Look for markets exhibiting extremes in positioning. Strong upward (downward) trending markets combined with extreme net-short (net-long) client positioning, results in a bullish (bearish) signal.
Using IG Client Sentiment for a clear directional bias
The summary table on IG Client Sentiment, displays the number of traders holding long positions in a selected market, to the number of traders holding short positions in the same market.
Traders should be drawn to extreme levels (very short or very long) when analyzing sentiment, as this is where the tool provides clearer signals. As can be seen in the graphic below, there is a relatively extreme figure of 78% for NZD/USD. The figure is written in blue (representing longs) and the horizontal bar also depicts the sentiment imbalance in favor of the longs.
Using client sentiment as the starting point however, can be extremely useful as it can inform which market to trade and in what direction, before any other analysis is even done. Thereafter, traders can use technical analysis to spot ideal entry and exit points for that market.
Establishing the market and direction: Look for markets exhibiting extremes in positioning. Strong upward (downward) trending markets combined with extreme net-short (net-long) client positioning, results in a bullish (bearish) signal.
Using IG Client Sentiment for a clear directional bias
The summary table on IG Client Sentiment, displays the number of traders holding long positions in a selected market, to the number of traders holding short positions in the same market.
Traders should be drawn to extreme levels (very short or very long) when analyzing sentiment, as this is where the tool provides clearer signals. As can be seen in the graphic below, there is a relatively extreme figure of 78% for NZD/USD. The figure is written in blue (representing longs) and the horizontal bar also depicts the sentiment imbalance in favor of the longs.
