The SSI Ratio which measures the sentiments and open positions showed in this chart has shown how most of the traders using this tool may be influenced with the majority of the positions. However, may we also state that the actual measure is totally different from when the data of these figures were gathered. However, the overall bias for most of the major pairs including the cross rates would now show totally the opposite of what the market has done.
Not that the Bank of Japan intervened in the market but rather where most investors and relative traders would normally make a few unnecessary mistakes. but the irony of the matter is that these indicators as they claim is a contrary method of the market sentiments. So Whenever the opposite occurs it is contrary to the fact, but the orientation of applying this tool is that whenever the actual market movements coincides with the SSI ratio then they can not claim that it is a contrary analysis.
In essence, the orientation of how to trade the Forex market has to be explained and clearly be represented true to its form. Ever since, 1986 when the cross rates were included together with the major currency pairs; trading the Forex Interbank market has been a little more complicated. Now with all these technical trading platforms the more it got complicated.
In addition, the recent decline of the CFTC leverage in FX trading it even be much more difficult for many retail investors and traders to make money. It was difficult for them to make it when the leverage was bigger ; what more if its smaller.
In summary, Trading with technical tools, sentiment value and leverage trading has to coincide with a trading philosophy and better understanding of how the forex trading could benefit the overall market place by providing a more straight forward analysis of the market. Whenever its wrong then its wrong. But when its right then try to apply and learn from how it took to win in the market.
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