Live Speculative Sentiment Indexes (SSI)
What is SSI?
The Speculative Sentiment Index, or SSI, is a tool used to determine the positioning of other traders and measure other traders’ bias on currency pairs and other major markets.
Many forex brokers offer SSI data based on the positioning and bias of their clients. The SSI data measures how many traders are bullish or bearish on specific currency pairs and compares traders’ open long to short positions.
Unlike COT reports and other sentiment tools that may be delayed or require costly subscriptions, the above SSI data is provided in real-time across key markets at no cost to you.
How to Use SSI?
An effective way to interpret the SSI data and use it for trading is to pick a specific currency pair, take the long positions and compare it to the number of short positions, and turn that into a single ratio.
If more traders are long than short, the ratio will be positive. The opposite is true if more are short; the ratio is then negative.
SSI is commonly used as a contrarian indicator: if most traders are long, then expect price losses. If more are short, then we can predict price gains. The idea is to profit by taking the opposite approach from the majority of traders. While this may not seem to make sense, remember we aren’t looking at bias and not total market positioning. A trader may have 100,000 lots or 10 lots, they’re still considered longs.
The goal of a trader using SSI data is to time market moves while using retail forex market sentiment.
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