SSI is a positioning tool gauging market sentiment. Scalpers will use SSI extremes to identify Forex trends. An extreme negative GBPJPY SSI reading may lead to continued bull trend bias. SSI (Speculative Sentiment Index) is a proprietary trading tool offered to FXCM clients through DailyFX PLUS. SSI data shows forex trader positioning. See where other traders are in the market with DailyFX's exclusive Speculative Sentiment Index. We use a range of cookies to .
Based on the response from our readers, it came to my attention that not many have used, or even heard of, the Speculative Sentiment Index or SSI. Most traders that participate in the Forex market lose money and for the first couple years of my trading career, I was a part of that statistic. The SSI is an index released twice a day that gives us a comparison between how many traders are buying and selling each major currency.
Each account is counted once, regardless of trade size. The result is a single number, positive or negative, that gives us trader sentiment. If SSI is positive, there are more buyers than sellers. If the SSI is negative, there are more sellers than buyers. The actual number represents the number of traders trading in the more popular direction for every one trader that is trading in the less popular direction. If SSI is These calculations are updated for each major currency pair twice a day inside DailyFX Plus , pictured above.
So now that we understand how to read the SSI, how can this be used in our trading? It is actually very easy. We want to only take trades opposite of the SSI. So if most people are buying a pair SSI is positive , we only look for selling opportunities. If most people are selling a pair SSI is negative , we only look for buying opportunities. Regardless of the reasoning we use, there is no denying that price often times has an inverse relationship to SSI.
Understand that there will be times when SSI will get us into some bad trades. It is not the Holy Grail. But it can be used as effective direction filter for your strategy, whatever your strategy may be. It certainly has helped mine. The steps for creating Synthetic SSI for these crosses are fully explained here.
It is a heavier read than many of my articles, but useful for traders that frequently trade non-traditional cross pairs. Even though sentiment is still showing more sellers than buyers traditionally an SSI bias to buy , the massive shift could indicate we might look to sell the EURUSD instead.
Studying the effects of change in SSI and price is a topic complex enough for its own article, something I intend to write up at a later date. But in the meantime, using SSI in the traditional manner is suitable in most cases. SSI will rarely move that quickly. Then, review your progress and see if SSI and scalping is for you!
To contact Walker, email wengland fxcm. New to the FX market? In the course, you will learn about the basics of a FOREX transaction, what leverage is, and how to determine an appropriate amount of leverage for your trading. DailyFX provides forex news and technical analysis on the trends that influence the global currency markets. Learn forex trading with a free practice account and trading charts from FXCM.
Search Now you can search stock related news and private companies such as Airbnb. Give feedback on the new search experience.
Markets close in 4 hrs 43 mins. DailyFX November 20, Talking Points SSI is a positioning tool gauging market sentiment. Scalpers will use SSI extremes to identify Forex trends.
Recently Viewed Your list is empty.
If most people are selling a pair SSI is negative , we only look for buying opportunities.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Spot Gold prices may continue to fall. We want to only take trades opposite of the SSI.