Could positioning ratios in currencies indicate Wisdom of Crowd?

Hello Pynksters,

It would be interesting to explore if positioning ratios of various currency pairs such as EUR/USD - which is traded by retail traders with brokers such as FXCM, Oanda, IG - would reflect similar Wisdom of Crowd than what Pynk is modelling based on predictions from the community for Bitcoin, Nasdaq and Gold.

Most brokers publish real-time positioning ratios (how many long vs how may shorts) which theoretically should reflect the sentiment of those traders and in that whether they are bullish or bearish on certain currencies.

Webbites which tried to make sense of this data shows that retail traders are generally wrong on the direction of currency movement on the long term, however, short term extremes positioning by traders indicate movement in the correct direction of the currency.

Any thoughts?


Welcome to the community @tamas.braun. The is an area I am unfamiliar with, so I will need to read up on it. Perhaps you can add a brief explanation for those like me to help is out. Also, check out the many interesting topics in the forum and head over to introduce yourself.

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Time to time i am using Binance futures data
If retailers are taking long position and top traders are going short then most likely price is going down after while.Work also in opposite direction
However when there is strong bull then both are going lol
It works only like a additional indicator


Very interesting with regard to being correct short term. I would love to know if long term predictions are random (like chance - the traders guessing) or are skewed in the wrong direction in some form of replicable bias? If latter, it would help Rose AI to extract crowd wisdom from that long term data, and would be a cool info for evolutionary anthropologists.