The IG Client Sentiment (IGCS) is exceptional, proprietary and possibly valuable to traders. The article will outline the next illustrative points:
What's IG Client Sentiment (IGCS)?
WHAT IS IG CLIENT SENTIMENT (IGCS)?
IG Client Sentiment (IGCS) is a tool that dealers can use in conjunction with a wider technical and/or fundamental strategy. IGCS incorporates retail trader positioning (short and long ) to invent a sentiment bias. This is represented in percent form (see image below) which assists traders in identifying market imbalances which could result in possible chances.
The two most well-known are open interest in alternatives, which largely applies to stocks, and also the Commitment of Traders Report (CoT). What sets IGCS apart is the huge sample size of retail dealers which provide more usable data concerning indicator readings, multiple market data sets (FX, equities commodities) and timely upgrades for these markets which are refreshed several times each day.
The use of IGCS as a technical index can allow traders to confirm or refute signals generated by their broader trading strategy. Both basic and other specialized techniques are used to judge trends, ranges, potential reversals etc. so integrating IGCS provides another layer of information to help verify a hypothesis.
IGCS can be considered as a leading index since it utilizes past and current data to project potential future price movements however, as IGCS (retail) covers just 1 element of this market equation, traders should not rely solely on the IGCS tool for trading decisions. Simply put, retail traders contribute only a specific percentage of market input so naturally other factors will have impact on the various sector.
As an instance, the EUR/USD chart below reveals the projectible character that can occur with IGCS. The highlighted are around the chart exhibits an increase in net short positions from retail traders which coincided with a rise in price action (EUR appreciation) on the price chart itself.