But I wanted to briefly write about a feature I have recently discovered on MyFxBook: Community Outlook. This is calculating the amount of positions in each directions on real, verified accounts monitored by MyFxBook. So it provides an insight into what thousands of traders are doing, updated every 60-seconds!! I even though about writing an application that would calculate this, but thanks to the Community Outlook it is free. Why it is so important? Ok, here is a sample screenshot:
Most of the retail traders are loosing money, this is a fact. So why not trade in the opposite direction than they do? What is the direction? Look at the Community Outlook. For example, a sharp up move on the GBPUSD (yellow line), during which the % of long vs. short fallen constantly until reaching new high. This picture also perfectly shows how many people are using counter trade loss averaging systems on GBPUSD, as you can see, during the first retracement most of the short positions were closed (blue ellipses). In my opinion, this at some point will cause the GBPUSD to break out from the consolidation in which it is for the past two, three years... Counter trend traders do not have unlimited amount of money in their pockets and eventually a move wiping all those counter trend positions will happen and again, this will strengthen the breakout and more margin calls which will strengthen the move again and again...
But anyway, I have written a C# application what will store this community outlook statistics in a MS SQL database for all pairs on a 5, 15 minutes and 60 minutes basis. After a few months, once I it will build up some history I will build a trading system based on this.. This should be something, really looking forward to it :)
