Sentiment is something that is happening NOW, inwards the moment. It could alter inwards seconds when a fundamental banker would tell something unexpected. COT written report is nearly seat information for the final calendar week in addition to gets to you lot iii days late. Maybe you lot tin brand coin past times gauging a chip longer term marketplace bias in addition to taking contrarian watch when marketplace is heavily oversold/overbought. but i don't encounter how a written report tin tell you lot the electrical flow persuasion when all it contains is seat ratio of long/shorts inwards the marketplace 6-7 days ago.
Any tool that tells you lot nearly seat ratio's of a sure enough brokers clients similar Oanda in addition to social aggregating websites similar myfxbook is based on positions of retail traders. Now i dont intend many would endure interested inwards basing their merchandise decisions on that info.
Im non proverb that you lot cant brand coin using these tools, but the enquiry is nearly gauging sentiment,
Sentiment determines what volition positions ratio's of speculators volition expression similar NOT THE OTHER WAY AROUND. (except when a marketplace is heavily stretched in addition to cant displace farther earlier a hurtful squelch but that all the same at times postulate a catalyst)
Every twenty-four hours inwards the marketplace in that location is a even that influences the expectations of traders of what marketplace powerfulness produce that day. You postulate to know that even in addition to its much less complicated than nosotros convey made it sound. But in that location is or in addition to then other matter you lot should know.
Its no longer nearly persuasion anymore every bit much every bit its was since 2008 upwards until few months ago. Back Then you lot would only purchase risk assets in addition to sell condom heavens when it was risk on in addition to vice versa amongst risk off, in addition to then yep its was actually of import to know the marketplace sentiment. The whole dynamic started every bit rattling uncomplicated in addition to slow agency to trade. First marketplace would choke along falling for weeks when risk was off, than it shrinked to days, sessions, hours in addition to inwards the cease the marketplace would endure risk off 1 2d in addition to risk on the second. Rise of high frequency trading bots also kept reducing what a human could exit of a RORO move.
But immediately its changed, the correlations convey broken. Before EUR/GBP/AUD/NZD/ were seen every bit risk (high yielding) assets in addition to moved inwards tandem, USD/JPY/CHF were the condom heavens. H5N1 improve than expected US of America information would brand Risk assets similar EUR rising in addition to USD falling in addition to vice versa Now you lot encounter USD rising in addition to EUR autumn displace its no longer nearly risk but pure fundamentals. Dynamics convey changed to the extent that fifty-fifty EUR in addition to GBP broke off amongst commodities ccy's(nzd/aud/cad).
Who volition displace showtime to curlicue dorsum coin printing in addition to start raising involvement rates is all people are guessing in addition to betting on, The size in addition to side of their bets depend on information nearly economic scheme which you lot know is the economical data. The electrical flow bet is on the US of America displace of recent verbalize of fed nearly tapering displace of recent healthier information compared to other economies in addition to inwards the longer term nearly US of America getting unloosen energy independent amongst shale in addition to whole other materials you lot listen everyday.
Market is confused nearly whether if Feds volition taper or not, same amongst ECB volition cutting rates or not. Every US of America in addition to European Union information fig thats comes out tilts marketplace bias into 1 direction or the other everyday. These information figs (specially mid/low deportment upon ones) dint moved marketplace much after 2008, because that was all nearly RORO in addition to afterward got worse amongst European Union crisis when a greek politico could displace marketplace amongst his mouth. Even the NFP release was in addition to then tricky in addition to difficult to merchandise amongst people thinking nearly its consequence on RORO in addition to the implications on QE2/3/4 at the same time, in addition to everyone would larn their stops hit. Now fifty-fifty housing, weekly jobs in addition to PMI's (remember gbp inwards march/april) could develop the musical note for the whole session.
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