Social Indicators as a strategy?

[Kurrency]

I have been thinking.
Do social indicators really work? Would you follow a crowd or run the other way?

For example:
If 90% of the people are short EUR/USD at the moment and 10% are long.
(Current: 1.38034) which side would you be on?

I am asking these to see if social indicators in your opinion are of any value when trading .
Would you be interested in seeing stats of how many people are long or short at a given moment and would it help you make a better trade?

Sorry for all the questionmarks :innocent: just hoping we can start a discussion and questions usually provide answers.

-K

 

[Kurrency]

Nobody has taken a bite at this? ok

 

[HawkTrader]

It would be of value to me. But then again it depends on what timeframe they are short/long on. Somebody might be long for the year but short for the next 5 minutes... it doesn't really mean anything unless we know the exact details.

 

[Kurrency]

this is the latest stats on Eur/usd

But you are right Hawktrader that would be a great thing. being able to see their intentions for a trade

 

[HawkTrader]

May I ask where you get these from? It's quite interesting.

 

[Kurrency]

It's a new social networking site that allows you to share live trades automatically with the community as well as interact with others.

It is a beta site and i have been with it since the beginning. Features are being added constantly and it's becoming a very useful site. That's why I was wondering if anyone here ever used social indicators like these. I know there are some sites similar to this out there but people manually add trades and there is chance for faking the data.

Here's the link: Currensee | Trade Together
Have a look around and if you decide to sign up make sure to let them know you heard about the site on trade2win because being beta they are selective and looking for active traders.

They also have a webinar to showcase new features on the 18th and they hold webinars weekly for those interested. I could provide a link via PM but capacity a week is 50 people so I guess best option would be to check out the website and features

Edit: I see now Currensee has been discussed here before just a bit.
http://www.trade2win.com/boards/general-trading-chat/28835-question.html

 

[fxmonk]

Hi Kurrency,

One of the replies is correct--it really depends on the time frame. The social site is completely unreliable because it is based on a really small sample size which doesn't even consist of professional traders. If you want to be a contrarian, consider the following tools:

1. Deutsche Bank FX Sentiment indicators (I will try to find this online if you can't. I have it through a Bloomberg terminal, but most people don't have access to this technology)

2. IMM Futures Positioning (aka COT futures data): Although the turnover in the FX cash market is about 2 trillion + per day and much larger than the currency futures market, most institutions who are putting on positions are doing so in futures contracts, so you can see when they're positioned extremely long or short here.

3. Currency Options Risk Reversals and Put/Call ratios. This may be harder to find for people without Bloomberg terminal access, but try to search for it. Put/Call ratios show to what degree traders are buying insurance against a fall vs. a rise in price. If the ratio becomes larger then you know that the consensus is becoming increasingly bearish.

4. Oanda has some positioning tools that may be useful, but again, are not representative of the whole interbank market.

I hope this helps. For anyone else interested, there are many more tools and tricks like these.

All the best in your trading,

Kris Matthews

 

[Kurrency]

Thanks Kris, I will research those things and see what I can use.

How I am beginning to use the currensee site is:
If more than 80% are either long or short I'll get into this position and keep a 1:1 risk reward ratio for the TP and SL.

What I am hoping is that they develop their own charts and show the areas where members have put stop losses and take profits and also if some active traders join and contribute.

 

[N Rothschild]

waste of time...

think of it this way, a thousand traders with a 1000 dollars each are long, and 1 trader comes along with half a billion to short..

thats 1000-1 long..but who is gona move the market...

plus if you believe the old "95% of trader loose money" do you want to be following the 95%

 

[Kurrency]

I am hoping for that half a billion to be in currensee. but you are also right Genics

 

[dcraig1]

What you are referring to (or should be referring to) is measures such as the put/call ratio for options, or the short interest in stocks.

By definition in futures markets the number of shorts always equals the number of longs. But there may be some benefit in looking at the commitment of traders reports which show the net short/long position of commercial traders, hedgers and small traders.

 

[Kurrency]

they also have a twitter url and it seems like once in a while they will put the info i mentioned above on there

Example today:
Right now on Currensee.com, 23% of the community trading EUR/USD, 85% are short; 11% trading GBP/USD, 72% short, 10% USD/CAD, 100% long
24 minutes ago from web (That's 1Pm EDT)

Currensee (currensee) on Twitter

Didn't want to make a new post and put those statuses up as I see them because I have a life too
Not sure how many of you use twitter. personally i don't like it much yet but getting instant statuses is a must in the currency world

 

[fxmonk]

Hi Dcraig, I'm referring to looking at OTC currency derivatives (not futures) to gauge sentiment. If you open up a Bloomberg terminal you can see put/call ratios and 25 delta risk reversals for OTC FX.

What you are referring to (or should be referring to) is measures such as the put/call ratio for options, or the short interest in stocks.

By definition in futures markets the number of shorts always equals the number of longs. But there may be some benefit in looking at the commitment of traders reports which show the net short/long position of commercial traders, hedgers and small traders.

 

[jiggly]

do you have to link your profile to your broker account?, is there a way around this like, link it to a demo account, as I would not want to do it with my live account (never)....

I would be interested to look into it further, if I could.

thanks

 

[Kurrency]

the thing is.. demo accounts tend to skew the %ages so they have blocked them. what i saw on an email from the ceo regarding the linking accounts..

which broker do you have.. and why do you not want to link it?
the thought of giving password out or the trades you place?

they are trying to work on a read only password thingy to solve that problem because brokers tend to complain. I didn't have a problem linking real account though

let me know some info from the questions I asked jiggly and i'll try to find some answers for you.

 

[GammaJammer]

I think the people contributing to that data would largely be trading in such short timeframes that the data would be out of date before it's even published (leaving aside any other caveats about the quality of their trading, validity of the data etc). Plus sample size is not even remotely statistically significant, nor are they in any way representative of the whole market.

imho it's right up there with tick volume as a marketing ploy. Interesting though as I hadn't seen before. Thanks.

 

[Kurrency]

the one thing is, data is up to the second. you can see other member's past performance since they have traded there and they can't alter the data. so you could be selective who to follow.

it's more like if you want to interact with other people while watching their trades live it's great.
i've made some connections from people in egypt, israel, UK, canada and even US.

of course even I don't ever take its indicators 100% to heart but it's something still in development and I can't wait until they add charts and more visuals.. when i first joined it was extremely buggy but i've fallen in love with it.

 

[jiggly]

the thing is.. demo accounts tend to skew the %ages so they have blocked them. what i saw on an email from the ceo regarding the linking accounts..

which broker do you have.. and why do you not want to link it?
the thought of giving password out or the trades you place?

they are trying to work on a read only password thingy to solve that problem because brokers tend to complain. I didn't have a problem linking real account though

let me know some info from the questions I asked jiggly and i'll try to find some answers for you.

I dont want to link to it becuase it dont know anything about them yet,

it may be something i could use, it may not, I just wanted to have a nosy and see what its all about without having to give out such personal information off the bat.

 

[Kurrency]

Jiggly and others... would you like me to post the link to the next webinar when i get an email?
They claim they only have 50 spaces each webinar but that's the easy way not to give any info and still see what's inside.

 

[Vaco]

The sample size is too small to be significant Kurrency, there are only about 300 members on that site and on the social indicators the % relate to bout 20 active traders. The data would only be significant for you if one of those traders were in your trading team and you knew more about their style of trading.