MoneyTec 2.0 - Online Forex Traders & Brokers Social Networking Community » Trading Talk » Technical Trading

[4xis2ez]

I am going to post a graph of the long/short ratio from O-an-da web site on a daily basis. This is the ratio of their clients positions in eurusd and usdchf. Eurusd is in red and usdchf is blue. The middle line is 50%, or an equal balance of long/short. As of this post, eurusd is currently at about 31% long and usdchf is at about 79% long. This means that the markets are currently majority long usd. This graph will provide a historical outlook on this ratio which can be helpful in seeing where sentiment is at. Unfortunatly, O-an-da does not provide a historical look on this. They only provide a current snapshot of the number. Updates will occur in the morning, New York time.

[psperos]

I use to have a pretty good system for tracking this data. I had macros refreshing/ taking screen shots every hr so i could save the data a plot it out. This is one of the best indicators.

What i learned from doing this after a while the change is positioing from the periods before is more important that what the actually positioning is. For example we are net short euro now, being less net short by the end of today would coinside with a 50 pip or more pull back in the eur/usd.

Just wanted to throw in my experience with this stuff....

[4xis2ez]

Hi psperos,
I agree a history of data is needed in order to use this properly. Hence this may be of little use till more data is added. I am going to just add data once daily as intraday would be too much trouble. FXCM has their SSI Index, but they only release it once a week on Thursdays. I would like to see how the ratio changes on a daily basis.
You say you used to track this data. Any reason why you do not now?

[psperos]

I stopped collecting the data because i was exploring new trading ideas. It was very time consuming. I got more into automated trading and the time and research I put into that made everything else i was doing fade away or low priority.

I still look at oanda throughout the day. After a while you can see what the ratio graph will look like in your head without even punching the data in a chart. You will notice this after a couple weeks of data collecting

[4xis2ez]

I am moving the Oanda Long/Short ratio chart to my journal thread so that I can keep my stuff in one place. Here is the link. http://www.moneytec.com/forums/f118/...-trades-20668/

[4xis2ez]

Interesting, Oanda's name not banned anymore. Oanda, Oanda, Oanda, Oanda, Oanda,Oanda, Oanda, Oanda, Oanda, Oanda, Oanda, Oanda, Oanda, Oanda, Oanda,Oanda, Oanda, Oanda, Oanda, Oanda, Oanda, Oanda, Oanda, Oanda, Oanda,Oanda, Oanda, Oanda, Oanda, Oanda, Oanda, Oanda, Oanda, Oanda, Oanda,Oanda, Oanda, Oanda, Oanda, Oanda. He He.

[psperos]

i always pondered why FXCM and Oanda don't show historical data, or even a realtime graph for positioning, it can't be that hard to do. there is not doubt in my mind they look at the stuff 24/7 so they can see what risk they need to hedge against client accounts. The once a week and once every hour thing + no historical data is like dangling a carrot in our faces.

[4xis2ez]

Originally Posted by psperos

i always pondered why FXCM and Oanda don't show historical data, or even a realtime graph for positioning, it can't be that hard to do. there is not doubt in my mind they look at the stuff 24/7 so they can see what risk they need to hedge against client accounts. The once a week and once every hour thing + no historical data is like dangling a carrot in our faces.

That is my belief of how retail brokers make their money. They know exactly their customers positions, knowing that the majority are wrong. They then partially hedge customers positions, (or not at all if they desire to take extra risk) and they pocket the unhedged portion of customers losses into their own bank account. So it is in their interest not to reveal too many tools to make their customers profitable.

[psperos]

Originally Posted by 4xis2ez

That is my belief of how retail brokers make their money. They know exactly their customers positions, knowing that the majority are wrong. They then partially hedge customers positions, (or not at all if they desire to take extra risk) and they pocket the unhedged portion of customers losses into their own bank account. So it is in their interest not to reveal too many tools to make their customers profitable.

I agree, I had the oppertunity to sit next to a dealer before at an MT4 house. Basically the mini lots are on auto , the computer matches up all the clients for them BUT, the hedging is all manual when needed. I was always under the assumption it was more automated with the interbank platform to hedge but it's not. It's the brokers systems on one computer and and interbank terminal on currenex on another right next to it. In the middle is a HUMAM deciding if its time to hedge or not. I don't care what firm says there is no desk, it's BS. If customers are too profitable, they may not be able to hedge fast enough.. I mean they might lose only 15-30 pips at a time, but that added up is a lot of money plus they pay the interbank spreads. If the clients are not profitable, or on average the clients wash eachother out on auto matching, they don't even touch the interbank and the firm makes the full spread of every pair while people plow up their accounts left and right against other clients. This is how O anda is able to offer a 1.5 pip spread... they get 90% of that. they barely need to touch the interbank because its mainly clients trading against clients in units. regaurdles though, Oanda is one of my best brokers.

[4xis2ez]

I've been thinking about this and am wondering, is not this a conflict of interest? The broker draws clients to open an account with them, and the broker wants their client to lose money. If this is how retail forex operates, and this info becomes public, then this conflict of interest could be a regulatory nightmare.

[4xis2ez]

Horray! Oanda now has a historical look at Oanda's long/short ratio intraday. Here's the link. http://fxlabs.oanda.com/cgi/fxlabs.pl?id=8