Social Indicators might be the sort of useful indicator we were looking for

I am not a big fan of Bollinger bands or momentum indicators as they do not seem to really show much more than I can already see. The same with RSI it is just sort of a smoothed average combined with the current fluctuations, again for me all it does is loose the useful data (the current price and spreads), i know RSI etc can be useful for comparisons but when working in real time I find the only indicator I like to have usually is a moving average, well a few of them actually.

Other than that I feel we cannot see much more than trade volume, so in looking for other indicators we really need to think outside the box, to data we can find elsewhere, on the internet, news feeds, policy changes maybe.. but still you have to be careful not to get too distracted as the market actual prices do absorb new very quickly.... that old stereotype of waking up bright and early to read the financial times before the markets open.. well that’s a bit 1910 now, unfortunately, just as the digital age pretty much eliminated the spreads in the market by accelerating the speed of the marketplace, so to has the internet caused the speed at which the marketplace absorbs information to accelerate.

So RSS news feeds are sort of useful and help us keep our head out of the sand a bit, but the actual charts still present the useful data.

Social indicators are a new thing, we can get a real time running statistic, we can see a percentage of positions that are either buy or short based on etoros users. Yes they may be right or wrong, however compared to news feeds, it’s a number, we do not have to read it further... this is great. The information, it’s continuous, so whereas news will always have been written a period of time ago, and based on information a period of time before.

So what is this new information we have, how useful is it?

Personally I see it too ways, we either have our user base intensely betting in one direction, for example the NZD/USD has been seeing 95%+ ish sell statistics of late.

The other way is the userbase is very uncertain so the figure hovers around 50%, an equally if not more interesting scenario. We have a situation where most everyone disagrees.

I would not just make bets based on the user positions, you may have actually missed the entry window. Further we could also worry that for example, everyone has the same idea and a sort of  flocking mechanism is at play.

So I think we all hope anyway this is useful data, I so are use it to highlight an interesting market, a 95% one usually shows something spiky or erratic, also I use it before entering a trade to make sure I am not betting against a trend I have missed and I can tell you that is an annoying thing to do.

Additional:

eToro user trade data is available by logging onto the platform, also they make weighted data available based on the top 1000 traders positions:

http://www.etoro.com/webtrader/widgets/ this is a new information platform from etoro looking absolutly fantastic combining a news feed and trader trend data.

also a couple of other platforms make current trader positions available as a statistic:

http://fxtrade.oanda.co.uk/analysis/open-position-ratios no login

http://www.tradingfloor.com/topics/forex-open-positions no login

https://www.currensee.com/ (sign up required)