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Tuesday, April 19, 2011

Trader Sentiment Indicator (TSI) update - January/February 2011

Below, you will find an update on the TSI (see own page on how the indicator is built). The indicator is displayed together with the correspondent EUR/USD chart. Please note that the indicatior is calculated manually, at the moment we are working on the March update and soon will catch up with current developments.

It is possible to observe very interesting behaviour on this curve, specially since it's main input are news mixed with technical indicators. It accurately describes what happens with the pair, and in some cases, can be a very helpful guide to describe "what to expect" as the trader sentiment is not something that changes lightly. It is a lagging indicator, that is for sure, however it has helped me greatly on my strategies (i.e. I would never trade against the main TSI direction.), but that is me, other traders might take the peaks of the TSI and trade against it for a short period, and still be very profitable.

Trend lines have been added to see when the trends are broken