There are on average almost $4 billion of forex spot transactions on a daily basis. So what is this mean? Retail traders monitoring, shows all traders long and short positions on the market. It can be used as a sentiment to determine positioning across a range of assets. Essentially, it shows where the majority of traders are positioned and how much in percentage they are going long and short. This data collected from real market, and is suitable for short term trading, combining advantages of both technical and fundamental approaches.

Unfortunately, statistical analysis shows that the majority of retail traders, are trend fighters and take positions against the market trend. this appears to be human nature more than logic as this pattern continues to play out. And These traders attempt to call tops and bottoms in the market by trading reversals in strong trending markets. This goes completely against the fundamental concept of, ‘The trend is your friend’. The trend momentum will benefit too when the traders that are against the trend exit from the market.
You can see the corolation between this data with change the price and real real market sentiment below.

Look at the below chart. It's clear that prices correlate strongly with the sentiment of sellers. Consequently, when prices rise, the number of sellers also increases, and conversely, when prices drop, the number of sellers decreases. Therefore, retailers' sentiment is regarded as an inverse indicator for buying and selling assets.

We use this data as a sentiment indicator to get more depth from the market and our trades.

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