What exactly is average short and long on the outlook from this forex app. (see attached) I am confused what it means with the figure it gives. For instance avg long for gbpusd is 1.4847 but it’s not been at that level for many months. Is it the average level for take profit?
FXCM has a similar indicator called the Speculative Sentiment Index. The red and green bar shows how many of this brokers clients are long or short in each pair. You will notice on the EURUSD that most traders are short that pair despite being in an uptrend, that is the nature of traders, the majority always seem to be on the wrong side of a trade, you noted the high average price of GBPUSD, this shows how traders like to hang on to their loosing trades. Look at all the people long USDCAD, that pair has been in a 3 month down trend yet traders are still buying longs, that is crazy.
This is a contrarian indicator, if you use this in your trading the idea here is to go against the majority
Nice explanation Dennis
Got it, thank you for explaining Dennis.