A1 Trading Company

Retail Positioning

Retail sentiment is helpful to traders as it provides valuable insights into the behavior and sentiment of individual investors, often serving as a contrarian signal that traders can use to gauge potential market reversals or momentum shifts.
WHAT IS RETAIL POSITIONING?
The retail positioning table showcases the latest open positions data on each symbol. We track retail positioning for every symbol available in the EdgeFinder (except for US10Y bonds)
HOW CAN TRADERS USE THIS DATA?
We use retail positioning as a potential contrarian signal. If retail positioning is heavily long (60% or greater) we consider this a potentially bearish signal. If retail positioning is heavily short (60% or greater) we consider this a potentially bullish signal.

How the EdgeFinder Scores Retail Positioning Sentiment

Retail Positioning Calculation

Retail sentiment is the measurement of the overall long/short positions on a pair, commodity or index. Historically, the crowd is rarely correct picking direction. They will usually try to trade a reversal or catch a big swing against strong trends. Although this type of trading can work, it is not often that they are accurate. Sometimes, retail is too early, too late, and even flat out wrong. With that said, the EdgeFinder uses an inverse score to which way the crowd is trading.

The EdgeFinder considers retail positioning a contrarian signal if positioning is above 60% long, or below 40% short. Meaning; if retail positioning is greater or equal to 60% long, the EdgeFinder will produce a -1 score for retail positioning. If retail positioning is below or equal to 40% short, the EdgeFinder will produce a +1 score for retail positioning.

Here is how we score retail sentiment:
The retail sentiment metric displays data based on the positioning of retail traders. For us, this is a contrarian signal producer.

If retail traders are 60% long (or more), then this is a bearish signal (-1). If retail traders are 40% long (or less), then this is a bullish signal (+1).
So the overall, score for retail can only go from -1 to +1.
Frequently Asked Questions (FAQs)
View more FAQs here.

What time frames can you use the edgeFinder on?

The EdgeFinder gives directional bias and is not time based. Therefore, there is not a specific time frame that is best for the EdgeFinder.

What assets are included on the EdgeFinder?

Forex Majors:
AUDUSD, NZDUSD, USDZAR, GBPUSD, USDJPY, USDCAD, USDCHF, EURUSD

Forex Minors:
AUDCAD, AUDCHF, AUDJPY, AUDNZD, CADCHF, CADJPY, CHFJPY, EURAUD, EURCAD, EURCHF, EURGBP, EURJPY, EURNZD, GBPAUD, GBPCAD, GBPCHF, GBPJPY, GBPNZD, NZDCAD, NZDCHF, NZDJPY

Metals:
XAUUSD, PLATINUM, SILVER, COPPER

Energy:
USOIL

Indices:
GER30, US30, SPX500, US10Y, NAS100, JP225, UK100, RUSSELL

Bonds:
US10Y

Is the EdgeFinder realtime?

While the EdgeFinder is not necessarily realtime, it is fully automatic in its data collection. The EdgeFinder uses a variety of data sources and inputs. Most price data updates are on a 15 minute timer, while economic data updates every few hours. COT data updates weekly (as it only releases 1 time per week), and retail sentiment updates every 30 minutes.

Video Tutorials

How to use retail positioning
Retail Sentiment Explained: How to Trade AGAINST the Crowd!
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There is a significant degree of risk involved in trading securities. With respect to foreign exchange trading, there is considerable risk exposure, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.
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