Forex Long to Short Position Ratios

by Brian Brown, 881 days ago

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The long to short position ratio is a measure that tells us whether Forex trader are bullish or bearish a particular currency pair. It is the ratio of the number of long positions to the number of short positions for a given currency pair.

Some brokers release the long vs. short ratio numbers for major currency pairs based on their clients open positions; the data from one broker is downloaded by this item. The item gets intraday (05:00, 11:00, 17:00 and 23:00 at GMT+0) Long to Short Position Ratios for the last three months and for 16 Forex pairs: USD/CAD, GBP/JPY, GBP/USD, NZD/USD, USD/CHF, AUD/JPY, EUR/AUD, USD/JPY, GBP/CHF, XAU/USD, XAG/USD, EUR/GBP, EUR/CHF, AUD/USD, EUR/JPY and EUR/USD.

The Long Short Position ratios is interpreted as follows: When the ratio is above 50% then, at that moment, the number of Forex traders holding long positions is greater than the number of traders holding short positions. When the ratio is below 50% then the number of traders with long positions is less than the number of traders with short positions.

The Long to Short Position ratios are saved in a new database "fx_lp_ratio". The time associated with the data is set to GMT+0. You can specify another GMT+N value by updating the download item, clicking on "1 Field(s)" and then changing the "GMT+" value.

Few weeks ago, I have uploaded an item that gets long position ratio for EURUSD FX only. You can get this item here: EURUSD Long Positions Ratio.

Example of trading rule using the Long-Short Position ratio:
buy = cross(GetData("fx_lp_ratio", "ratio"), 50);