Why contrarian traders are normally more profitable?
Generally speaking, more long positions don’t necessary suggest more confidence in the direction of the current trend. Indeed, when traders start having adverse movements against their position, many tend to increase the size of their position with the purpose to average down their entry price in one last attempt to recover from previous losses. However, the higher the number of short orders in a bull market the more dangerous is to take additional shorts because many of those traders who just entered the markets are also leaving their protective stop losses just above the current price action. The current positioning for the world’s most heavily traded currency pairs is located in the table below. What is the FXCM SSI? SSI stands for Sentiment Speculative Index. The SSI is based on proprietary customer flow information. It is a real-time snapshot of the positioning of more than 30K retail traders given by the FXCM Execution desk. The absolute number of the ratio itself represents the
