What If You Could Have Predicted the Yen’s New Record? The SSI Saw It Coming.

Quote from AK100:

Impress us all.

Tell us what the SSI sees 'coming' for next week.
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Hi AK100,

DailyFX puts together a weekly report on the SSI outlook. Here's the latest: http://www.dailyfx.com/forex/technical/ssi/table/2011/04/21/ssi_table_story_1.html

SSI shows you whether positioning by retail traders is net long or short and to what degree. Forex trading crowds tend to fade momentum. Most often we see the majority of traders sell into rallies and buy into declines. During trending market conditions, this means that we use the SSI as a contrarian indicator. If the majority of traders are short, then we would expect price to continue rallying.

Is SSI the holy grail? No of course not. If market volatility decreases and range conditions set in, then the majority of retail traders will probably do better with picking tops and bottoms. But this is another tool you can use if you believe the majority of retail traders tend to be wrong.

-Jason
 
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