News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
The Professional Sells as the New Trader Buys

The Professional Sells as the New Trader Buys

Thomas Long, Course Instructor

The shaded area of this USD/JPY chart also shows that retail traders have been big buyers all the way down. This is a Speculative Sentiment Index (SSI) chart from DailyFX+ and shows that retail traders have opened more than two buy positions for every sell position at the lowest point, all the way up to over 10 times as many buy positions for every sell position at the highest point. But yet the market has moved down at the same time. How can that be?

The direction of the trend of a market is usually determined by the big traders who trade size. They are usually the professionals and are commonly referred to as institutional traders. They see the fundamental situation of the USD/JPY as being bearish and continue to sell.

The retail trader, who is usually fairly new to trading, has a habit of trying to pick tops and bottoms. But the statistics show that most retail traders lose money while professionals, by definition, are profitable. This is not unique to FX, but rather is typical across all financial markets in the world. The professionals trade with the trend while the new trader trades against the professional and the direction of the trend.

Which group do you trade with?

USDJPY_body_71341d1288796171-chart-day-usdjpy-1103.png, The Professional Sells as the New Trader Buys

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.