IG Client Sentiment : are shorts really this many ?

[padutrader]

the correct figure is about 1/3, not 90%.

no in the first year failure rate is 90%
this is government release but I am not bothered enough to find the link.....
I prefer having one more scotch on my sunday evening and go to bed

 

[smcoder]

No worries. Of course, bear in mind that at any one time about 75% of active private retail traders are losing money.

Yes, but notice that the signal they are giving already takes this into account considering that is always the opposite of what the majority of their retail traders are doing.


Thanks
sm

 

[tomorton]

Yes, but notice that the signal they are giving already takes this into account considering that is always the opposite of what the majority of their retail traders are doing.


Thanks
sm

Not sure what you're saying - whose signal? what signal?

The IG sentiment report just shows the % of clients long v's the % of clients short.

 

[smcoder]

Not sure what you're saying - whose signal? what signal?

The IG sentiment report just shows the % of clients long v's the % of clients short.

They call it "trading bias" now

But they once called it signal

And this is how the signal (or trading bias) is obtained. They in other words suggest to do the opposite of what the majority of their retail traders are doing especially if traders are fighting the trend.

where

-2 means shorts >= 2 x longs
+2 means longs >= 2 x shorts


Thanks
sm

 

[Nighthawk]

No worries. Of course, bear in mind that at any one time about 75% of active private retail traders are losing money.

That figure is an "understatement"....

 

[smcoder]

- this ratio is fairly helpful but you should also consider other things like AAII weekly and compare to the historicals. plus monitor what narratives are being pushed in the media, you should get a fairly good sense of what's going on.

How should the AAII weekly sentiment be treated, as a contrarian signal?


Thanks
sm

 

[dozu888]

How should the AAII weekly sentiment be treated, as a contrarian signal?


Thanks
sm

it's not as simple as 'buy if bullish is below 35%'.... although usually it does work.

it's just another piece of the puzzle in figuring out the public sentiment. you can download the historicals, and AAII actually graphs it for you so you can see in the past couple of decades how the public feel about the market along with the rise and fall of the SP500.

by the way you will see recent years, including today, is a period on the low end of public participation and optimism.