FXCM’s has just launched a new tool for its clients, feeding some useful data to traders publicly. The tool is called Market Data Signals and is aimed at providing additional information that could facilitate trading decisions.
The brokerage has set up an account on Twitter called FXCM Market Data, where it is publishing the latest information from a set of proprietary tools. The feed of the tool is also available directly on the website of FXCM. Traders can not only view market positioning but also spot new trade opportunities.
The signals are published in real time, using FXCM’s Speculative Sentiment Index (SSI) and Grid Sight Index (GSI). The proprietary tools use data from open positions at the brokerage and big data.
The SSI derives signals from the trading book, while GSI recognizes patterns and trends that are historically relevant to the pairs that are analyzed.
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— FXCM Market Data (@FXCM_MarketData) June 28, 2017
The company is aiming to add the tool for traders that are keen to use new strategies to open and close positions.
When traders look at retail positioning, the indicator for one-sided positioning is usually a contrary one. The more retail traders bet on the rise of a certain asset, the bigger the likelihood is that the value of this asset will fall in the near future.
Granted, traders will need to be aware that using only sentiment indicator for their investment decisions will probably not be an adequate gauge of the situation, since often one signal is not sufficient to start a trend move. FXCM is merely providing one more variable which traders can use to make their decisions.