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The Forex long-short positions ratio is a measure of the number of long positions to the number of short positions taken by currency traders. It is a quantitative measure of the bullishness or bearishness of Forex investors and it can be used as a trading rule or in a trading system entries or exits.
The ratio of long Forex position is calculated by taking the number of long positions and then dividing the result by the total number of positions in a given point in time. The result is a percentage value that tells us whether Forex investors have more long or short positions for a specific currency. In fact, a long positions ratio that is above 50 indicates that there are more long positions than short ones, while a ratio below 50 indicates that there are more short positions than long ones.
This download item gets intraday long positions ratio for the EURUSD currency (Euro / United States Dollar) and for several months. It then saves the data in "fx_lp_ratio" database, under a field called "ratio". You can access the data using the "GetData" function or create your own long positions ratio-based indicators using the custom functions tool.
Example of a trading system rule that buys the EURUSD when its long positions ratio is lower than 40%:
rule1 = GetData("fx_lp_ratio", "ratio") < 40;
To display a chart of the long positions ratio over time, simply select the EURUSD currency symbol and type the following chart formula:
a = GetData("fx_lp_ratio", "ratio");
plot(a, "LP Ratio");
Example: On October 14, 2010 at 10 GMT, the long positions ratio of the EURUSD was equal to 42%, which means that 42% of transactions involving the EUR/USD currency pair were long and 58% of all positions were short.
Note that the date is set to GMT+0. If you want to change it; update the item, click on "field" for each URL item then set the appropriate GMT+ value (It should be the same than the GMT offset value of your intraday/tick data).
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This item no longer works. You can use this downloader instead: Forex Long-Short Historical Position Ratios
Trading financial instruments, including foreign exchange on margin, carries a high level of risk and is not suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in financial instruments or foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
