Contrarian Retail sentiment trading

[Convergence]

Are there any traders on the site that use SSI as a trading basis? or any newer traders that would like to learn the style? It's not my main trading style but I will usually take a small handful of SSI trades a month mainly on a 4H or daily you can basically just check the charts and the sentiment once a day 30 mins maybe: (see image below) Basically it involves fading the retail sector but its more than just that: price structure, fundamental backdrop, COT, Price action etc all play a part. Its an interesting style with a good rationale (basicaly trading with the smart money). I'm not doing this to teach anything but just to create conversations and stimulate discussions on the markets if anyones interested just post if not the thread will soon be relegated to the bottom of the page

 

[Convergence]

I have taken a short AUDUSD position after mulling over a short for the last few days. Retail traders have increased their net long positions by 22% over at Dukascopy in the last few hours after already being heavily net long as a group. I'm just going to fade them.(Edit on the tech side the trade is a type of 'Antis' trade http://adamhgrimes.com/blog/library/fundamental-trading-patterns/)

 

[Convergence]

stopped for -2 pips. Was using a fixed 20 pip trailed stop, price dropped 18 pips from my entry before reversing and taking out the stop- tiny loss

 

[Convergence]

EURGBP: Retail have switched from net long to net short over the last couple of days, as price is rising (its the only cross where this is happening, it doesn't happen that often every few weeks maybe, thats why you don't get a lot of trades using this method) UK retail sales have muddied the waters a bit but will be looking for a long set up/Bullish PA

 

[piphoe]

i'm following it,thx!

 

[Convergence]

I got a long set up on EG -double bottom on the 1H (had to go out for a bit, so couldn't post entry,) in profit, targets 0.8600 what some might call the 'Value area' Will be looking for a long in EU as retail is now ' shorter-er''

 

[Convergence]

Didn't take a long EU but took a second position on EG, Stops above net long(risk free) Trades on a 5min - simple breakout and back test. it's also a center band rejection trade if your trading Keltners, a 'Bullish Engulfing' for the candle freaks and an L2 if you trade Al Brooks style.

 

[Convergence]

USDCAD is also a cross heavily shorted by Retail and the COT is at Bullish extremes on the CAD. Obvious support around 1.3580. I should have limit ordered this before I went out, just bought it anyway I think it's very much worth the risk it's a trading range for now, so buy low sell high. I do realise tho that the last down leg might be an impulse move and this is just a retrace before support gives way but I'd be surprised, maybe get a stop hunt before we go north though so will have to monitor

 

[Convergence]

I pulled the CAD trade for now flat. In a true breakout this doesn't happen, dealers ram the price up quickly to try and stop underwater longs liquidating so they dont have to absorb that supply, This is not happening here I'm wary and I don't want to become a 20 pip underwater long looking at a third test of support

 

[Convergence]

Ok so we didn't get a classic dealer breakout but it still might be an MTR (Major trend reversal) There's an impulse bar and a retracement type move, we're in the PRZ(potential reversal zone) and its a minor break and retest and a Keltner CBR it's worth a small risk as the upside could be large with the COT the way it is and I'm back in at the same price, If we get a HH I'll be holding this

 

[Convergence]

And finally got my AUD short back on, Triangle breakout, hopefully lots of capitulation/catastrophe retail long stops below

 

[Convergence]

WOW EURGBP targets comprehensiveluy hit edit and long again 0.8581 because when you get these types of unexpected moves that catch traders out you usually get a second leg

 

[Convergence]

AUDUSD we had the breakout now we're having the back test stops to entry as if price returns to my entry we are back in a trading range and anything can happen then. If the back test holds I'm in business

 

[Convergence]

And USDCAD? stops to entry as this is one seriously erratic pair, expect the unexpected

 

[Convergence]

AUDUSD and EURGBP both taken out at protective stops for a couple of pips each.

I did set a stop buy order above the EURUSD market yesterday eve which was filled a couple of hours ago, because retail is heavily short the pair and I'm bullish the euro

 

[Convergence]

Target hit above on EURUSD. Retail is getting long into the drop in USDJPY (The 'catch a falling knife Brigade') All I see on the 4H Candlestick chart below is a strong bearish impulse move and a very weak retracement stalling around 111.60. If price starts to drop from here I will be getting short

 

[Convergence]

I took the short on a smaller TF Targets 110.10

 

[Convergence]

Stopped flat, pity as I was 43 pips up earlier

 

[Convergence]

Not much has happened this week with retail positioning except USDCAD extremes have flattened. Retail is still heavily short EURUSD and has increased net short exposure this week. The thinking being. of course, that it has gone up 'too far' and is due to fall, there's a lot of space under the price on the screen! To me PA looks like a pennant (4H) and know doubt there will be plenty of stops around 1.1250 that I'm sure the dealers will be looking to take if possible. I will be keeping an eye on the market early next week. No trades at the moment though

 

[Convergence]

Euraud

Doing my usual weekend research. A few things have caught my eye but especially the net positioning in EUR and AUD by the specs(non commercials). Firstly of note EUR specs have switched over the last 3 weeks from net short to net long(first time since May 2014) while retail is net short and in AUD specs have aggressively cut their long exposure to close to net flat while retail has almost gone 'all in' with large net short positioning in EURAUD. My bullish view of the euro continues and maybe the best market to make a long play would be EURAUD. I will be looking to get long next week depending on PA. Charts and tables are attached and annotated