Sentiment trading Method/Tools

Apiga · May 6, 2016

I have been studying, namely, understanding of stereotypes of crowd behavior in the market for the last two years. Due to an idea that the market crowd generally makes mistakes and market-makers profit just from the losses incurring by the crowd I came to a conclusion that I will take the side of the market-makers and start earning along with them, if I trade against the crowd.

What do you think about this method, and tools i've developed?
It's free, no commercial. http://shark-fx.com/tools/

The package includes 5 tools at the moment, and another 2 tools are under development.

CurrentRatio

This tool represents a ratio of bullish and bearish traders for the current moment. Data from 8 brokers and for 12 currency pairs are available.

Ratio chart

A ratio of bullish and bearish traders in the Forex market is displayed as a chart. You can select different timeframes, brokers and currency pairs.

Mini Oanda

It is an efficient tool for the market crowd analysis. It displays data for open orders and open positions provided by Oanda, which is one of the largest Forex broker.

Pro oanda

It offers you more data and ways of the crowd analysis. This powerful tool provides you with more accurate information about an activity of individual traders.

Profit Ratio

It shows a percentage of profitable traders at the moment. The tool includes an additional chart of profitable traders and buyers’ activity, which is displayed separately.

Waiting for your response.

Handle123 · May 6, 2016

I know in my own trading, I would not use it, it reminds me of COT data take comes out every two weeks, Commitment of Traders, shows large trader, small trader and Commercials

There are some who swear by it, but I only go by Trading Plan, and COT is not included.

Crowd behavior is rather funny, retail is very interested in it and others have a plan, Commercials are generally going to be opposite of large traders cause Commercials using futures as hedges.

Crowd normally gets in late and gets out late.

K-Pia · May 6, 2016

True. If it has been tested systematically, why not.
Otherwise, I am not going to be the fool fading other fools.
They ain't consistent. Therefore you won't be neither. That's the problem.
It's like going opposite to quantum mechanics... They are random.
Leads nowhere. Either path ... If they were losing consistently.
That would be something else. But it's not the case.

ktm · May 6, 2016

I studied crowd behavior for many years as well, especially as it relates to market direction and feelings, fear/greed etc...

I think there was a time when this worked, probably before the algorithms became so prominent. I feel like technology has drastically muted the effect of real and true crowd behavior.

It's still useful with binary options that trade up to - and during - sporting and political events.

motif · May 7, 2016

While were on the subject, I was wondering if anyone read "Mass Psychology" by James Dines.

Apiga · May 10, 2016

K-Pia said:
It's like going opposite to quantum mechanics... They are random.
Leads nowhere. Either path ... If they were losing consistently.
That would be something else. But it's not the case.

Hello,
I want to ask you a question. For example, trading at fxcm or oanda, where your money goes when you lose? To a random trader, or to a big player, let's call him "black hole"?

In case of "random trader", we should see a lot of traders, who are near a zero and losing money with the speed of spread and commission. But in real, they lose money much more faster than i described before.

So where the losing money goes?

K-Pia · May 10, 2016

Apiga said:
Hello,
I want to ask you a question. For example, trading at fxcm or oanda, where your money goes when you lose? To a random trader, or to a big player, let's call him "black hole"?

In case of "random trader", we should see a lot of traders, who are near a zero and losing money with the speed of spread and commission. But in real, they lose money much more faster than i described before.

So where the losing money goes?

You & I don't know where it goes.
We could conjecture who's behind a trade.
But that's not an evidence for or against your system.
I told you my doubts. The only way you can prove me wrong,
Would be to show proofs that your strategy produce consistent profits.

bone · May 10, 2016

In liquid, exchange-traded futures I seriously doubt there exists a true legitimate population of "market makers" to be of any statistical consequence. Having been a designated market maker myself in the past, I also would question the notion that their trades are "profitable" in a statistically meaningful way over the long term.

Try it for yourself. Buy bids and sell offers and then manage to successfully flip them for a one tic profit in one of the more liquid and popular electronic exchange-traded futures markets.