If you want to try to predict which way the markets are going to move, it really helps to know where the big banks and financial institutions are placing their money.
Unfortunately this information is very hard to obtain for the ordinary trader, but there are other ways you can gauge market sentiment.
One easy way is to check out the IG website and look at all of the forex pairs because they will provide you with the latest trading behaviour of their current client base.
In other words, they will tell you what percentage of their traders hold long positions for any given pair, and what percentage of traders hold short positions.
So looking at the GBP/USD pair, for example, I can see that out of all the traders that currently hold a position in this pair, 75% hold a long position and therefore expect the price to rise, whilst 25% currently hold a short position.
Similarly with the EUR/USD pair, 49% of traders hold a long position and 51% hold a short position at the current time.
Of course you wouldn’t necessarily want to make trading decisions based on this data because you have to remember that most forex traders end up losing money.
However this is an easy way to gauge the latest sentiment for any forex pair and get a feel for the market, and the good thing is that you don’t need to open a trading account with IG because they provide this data free of charge on their website.
To access this data, simply go to their main forex page and click on the pair that you want to gauge market sentiment for.
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