Although it has a simple display, there are so many benefits which a trader can get from the
open position ratio. Unfortunately, most of beginners don’t know more about this thing yet.
In fact, this feature is closely related to the market sentiment and it can be a reference to open a position. That is why; before going further, a trader must understand about the market sentiment first.
The forex market is always related to the prices fluctuations. They bring everything into several directions where sometimes it cannot be guessed.
The situation like that is caused by market sentiment and some other factors as well. The definition is the deal or consensus from the market participants to anticipate certain price movements in some condition.
Understanding the Open Position Ratio and the Benefits
Open Position Ratio is the indicator of the market sentiment where it comes as a genuine feature from the broker or certain trading platforms. Usually, it is displayed in the form of percentage.
That can be in a form of the major data which represent the comlarison between the buyer and seller in an asset. That is why; it has several advantages for the traders such as:
1. Easier to understand about the market sentiment
The main function of this feature is to make you understand about that sentiment easily. Usually, the display will show a comparison of open and buy position from a broker’s client.
It can be also from certain users. In an easier way, this feature will help a trader to understand the market condition whether the trends are to sell or buy the commodities.
2. Help a trader to decide a position
After knowing the participants' decision, you will be easier to decide a place. The example is the EUR/USD pair open position ratio in a broker that shows 65% buy and the rests are sell.
A trend follower usually will follow the sentiment. However, a trader who find for the reversal signal may wait until the trend momentum is weakening and then open the sell decision.
It must be noted that this feature cannot be used as the only one reference. The function is more like a general overview about the asset condition in some brokers.
That is why; it needs the other analysis method such as the price actions or other indicators to get the more confirmed diagnose. The better result will be gotten.
How to use the Open Position Ratio
To read the data from this feature properly, you must pay attention to a comparison between the currency pair. Usually, it is called balanced if it has the buy and sell percentage in certain numbers.
The common ones are in 35% up to 65%. However, when the strong movement happened to a direction, the comparison can be very not balanced.
In an extreme situation, a trader may wait for the reversal of a currency pair. Generally they will open a position in the reversal direction because they believe that the condition has been in a saturation point.
Don’t be in a Rush and Learn Everything Properly
More about this open position ratio is that don’t be in a rush to make a decision. Learn the data served by this feature first and wait until some periods of time.
To get the more accurate result, you may choose and join the best forex broker such as Didimax. Their services will make you are easier to apply the technical analysis such as the resistance support.
Didimax forex broker has the low spread and competitive price which is suitable for the beginners and professionals. It is a legal platform which serves many kinds of the trading facilities.
So, join Didimax right now to
start your trading journey. You may use the open position ratio and other profitable features in Didimax.