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Client Sentiment - All on one page?

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At the bottom of each currency pair page is a widget box with 5 other pairs, showing client sentiment. Is there any way to show more than that at one time? I'd like to be able to see the client sentiment for 15-20 pairs at a glance. How can this be accomplished?

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That would be cool! And then you can rank them by positive negative ratios... interestingidea!

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we don't have that at the moment, but it would be an interesting idea! I'll pass it on - thanks for the feedback!

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Guest Jason

Get's my vote

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29 minutes ago, Exhale_Trading said:

With help of the API this is no big deal to fix.

is this something someone outside IG could whip up and put on their own webpage?

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Anybody with an IG account and basic programming knowledge can do so. The client sentiment is easy to retrieve via the API. So you can program your own little tool to show all the sentiments you want to see, rank them or do whatever you desire.

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I've built an Excel Add-in and have added some client sentiment formulas. What I find interesting is the much higher proportion of long positions across all asset classes. Surprisingly the FTSE100 is the least shorted of all the major stock indices. 

In the FX world, IG clients are long on all major pairs, regardless of whether they are effectively long or short the USD.

I will post this again with updated data, will be interesting to see how it changes over time (I suspect it won't actually change that much!).

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I think one important factor to bear in mind is that this is the sentiment of IG Clients. Now in FX Pairs, one would imagine the sentiment of IG Clients is not as great when compared to the Sentiment on Wall Street in general or say London based FX Hedge Funds, professional FX traders based in Hong Kong and Singapore, etc. Also is this for IG Clients worldwide or does it only include UK Clients for those traders in the UK and so on?

What could be done is for someone to look at the IG Client Sentiment and trade either with it or against it (opposite) and record the results in terms of profitable success or losses. This will help to add value behind the IG Client sentiment indicators. It will add meaning and context in relation to whether it can be even used in any trading decisions. I don't know the answer and some of you may well have already established the answer on this but that would be a great foundation and starting point. 

So for example only 31% of IG Clients are short the FTSE 100 at this moment in time. What is the current price action for the FTSE 100 doing? Are the 31% on the correct side of the trade? The other thing you do not know is when they opened their short positions and whether it has been open for a long, long time. Remember 81% of IG Clients lose money. When I look at the FTSE 100 and its high in the middle of May 2018 then it is still in a downtrend in my personal opinion since then.

Also the Client Sentiment indicator can be misleading. How many of the IG Clients are day trading, trend trading, long term traders, etc? There are many facets and layers to this indicator so one must be very careful. Personally, I would rather just follow the price action unless there is any credible analysis presented that can justify any use of IG Client Sentiment information. If it was worldwide total clients in 80 different countries, it could be more meaningful but where is the evidence in terms of data?

If I am missing something here then it would be helpful to know. What do traders use the IG Client Sentiment for and do they add any value in trading strategies or trading decisions and if so how? I can understand World Hedge Fund Sentiment or World Investment Bank Sentiment when it comes to trading but maybe I don't quite fully appreciate this indicator. May be I can learn something here to add to my 'trading decision basket'. I shall keep an open mind and see what others can articulate here. 

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I must admit I don't know exactly how IG determine the sentiment number, I presume it is based on number of global clients and how they are positioned? I also presume it gives equal weight irrespective of position size, so the £0.01 a pip trader is counted a one position, same as the £1000 a pip trader.

I think the fact that most clients are long on most markets is interesting. I also think it would be interesting to track how these numbers change over time. Perhaps you could use changes in sentiment to trigger trade decisions and track performance over time. My gut feel is that it could be a good contrary indicator....

Does anybody else look at client sentiment?

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@andysinclair,

One would like to think it is based on global clients but this would need to be confirmed by IG. I would imagine that this sentiment must fluctuate constantly as day traders could be short on one trade then long on that very same trade depending on that particular day. How does the IG Client Sentiment indicator deal with day traders? In fact does IG know how many of its clients day trade? If so then is this somehow factored into the IG Client Sentiment indicator?

I understand your point on Contrarian traders and it is an important point that you make. However, I feel that for example Commodity traders would use the data on long and short (futures positions) for their sentiment data or the Commitment of Traders Report Published by the CFTC. Also known as the 'COT'. 

There are possibilities on using sentiment to trigger trading decisions but it is how the sentiment data is derived and what it includes which is of paramount importance. There is too much uncertainty and vagueness about IG's Client Sentiment data which makes is unusable for me right now. Yes, it could be a contrary indicator but which IG Clients are actually using it as such? It would be interesting for them to share their insight and decision making process using such an indicator. What is unknown are the parameters used to derive the IG Client Sentiment indicators?

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Thanks for this @andysinclair, it's a great idea to collate all the sentiment data and present it on one page. DailyFX have long used this data, as you suspect, as a contrary indicator, firstly data input from FXCM and lately from IG.

You are right to wonder how the IG data is determined, (volume/size, number of transactions, number of traders short/long). IG specifies it is simply the number of their retail traders short/long so it is a simple vote ya or na irrespective of size of conviction.

Following this over years it is interesting that the percentages don't leap about but rather move more like the tides.

You seem to have calculated the data differently though, in the 'indices' thread I've posted DailyFX IG data previously and the latest real time on S&P 500 is the top pic showing currently 76% IG clients short while the second pic is from a post in the thread from 4th March showing 75% short. 

To be honest your data actually seems more realistic but I couldn't say why there is such a large discrepancy. 

https://www.dailyfx.com/sentiment?ref=SubNav

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Hi,

Like the idea! But first where do you get the sentiment data from for indicies or stocks? Can’t seem to find it? Thanks.

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@Caseynotes,

Thanks for this confirmation. Very useful to know.

@andysinclair@RichB-Trader,

So IG's Client Sentiment data is made up of its retail clients. Now in the large Commodity arena how significant are IG's retail clients in actually physically moving the prices of Commodities?

I am not saying that the IG's Sentiment data cannot be used or is not similar to what really is the sentiment. In my opinion the sentiment that really matters is of those who actually influence the price to move on any specific asset. That is the only sentiment data I would use. How influential are those traders who trade Commodities either via CFD or Spread Betting on IG's platform? I am talking about the world arena here as they are being traded all over the world. 

How many retail clients does IG have?

Of these how many in terms of numbers rather than percentages are long / short? What if out of 20,000 retail clients only 1,543 were long? The percentage for being long would be low. Now if out of 20,000 retail clients 18,787 were long the percentage would be higher. The point I am making is that the significance is important. So on say Gold, IG has 10,000 retail clients and of this only 24 were long Gold, this has to be taken into account. Otherwise the percentage are absolutely meaningless. What serious value can be derived from them?

How are any of you satisfied that IG for example on say Bitcoin (high margin requirements) does not have 10 retail clients and of these 8 are long and 2 are short? Now the percentages look significant as it would mean 80% are long and 20% are short. Now the key question here is how many actual retail traders make up the 80% and the 20%. What are the total number of traders? Even if IG provided this data which I am pretty sure it will not then the sentiment of IG Clients who trade Bitcoin possibly do not have any bearing or influence on moving the price in either direction so how significant is this? Again what value can be derived from this?

I will keep an open mind to see if anyone can present any data, information or serious arguments which can make me really think about changing my view. I have no issue about being wrong or maybe not even understanding something.

This is a very interesting discussion though.

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@RichB-Trader I am getting the data from the IG Index API via my Excel Add-in, I wrote a brief tutorial about it here (there is also an example spreadsheet): IG Index Client Sentiment Analysis Using Excel

@Caseynotes I can't explain the discrepancy with the SPX sentiment data, I am simply retrieving the raw number from the API.

@TrendFollower I think the most interesting thing about the sentiment numbers I have looked at is the high bias towards long positions, perhaps influenced by traders more inclined (no matter what the market is doing, what their system signals etc.) to go long rather than short.

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9 minutes ago, Caseynotes said:

ok @andysinclair, so the table you posted was just a sample taken from the web page https://www.excelpricefeed.com/tutorials/excel-igindex-client-sentiment-analysis  and is not up to date?

 

 

It was from there but I've just noticed those numbers are from the demo API, which for some reason is different from the live API....

Here's the current table, just updated from the live API:

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Thought I would post an updated spreadsheet, interesting to see IG clients (us!) now:

  • More short: major indices
  • More Long: GBPUSD and EURUSD
  • Very long: Bitcoin and Ether

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