Talking points on this podcast:
- VP’s view on why some technical analysis tools should be avoided
- Using IG client sentiment data
- VP’s trading strategy
This time on Trading Global Markets Decoded, our host Martin Essex is joined by the creator of training site No Nonsense Forex, known simply as VP. A trader of currencies, metals, oil and ETFs, VP rails against the use of both FX news and some common charting tools, explaining why he favors a different approach to the norm.
In this episode we focus on VP’s trading strategy, whether some technical analysis techniques should be avoided, and more. You can listen to this podcast by clicking on the YouTube link above or by using one of the alternative platforms listed below.
The technical analysis tools to avoid
VP believes that the old suiteof technical analysis tools is outdated, and that modern programmers are making tools now that are more relevant to today’s markets. So what are the technical analysis tools to avoid? He says: “I’d always see the same 12-15 charting tools, the same basic methods of trading [such as trendlines, support and resistance, Fibonacci]. I tested them all out and sank so much time into them, [and] really wanted them to outperform the new indicators I was seeing. But they didn’t come close.
“My channel is full of ‘self-doers’ that are willing to put in the work and find indicators themselves so they can call it their system, where it was nothing but frustration before.”
Using IG client sentiment data
Moving on, VP discusses his use of IG client sentiment data to gauge the behavior of market practitioners, and how the data can be interpreted. “It always seems to go like this: if traders collectively are going long, for example on EUR/USD, the banks, the people who actually have the money to move price, are always going to go the other way, and IG client sentiment data does a great job of showing just how this happens.”
He uses the example of the S&P 500 and its rise even while commentators discuss the likely upcoming recession. “[Bearish people] say the entire economy is propped up on counterfeit money and nothing else. Every single day they’re outraged at the price of the S&P 500 going up.
“But if they were to look at the IG client sentiment data, they would see just how short everyone is.”
VP believes the rise will continue as long as general sentiment is bearish, and it won’t go down until the bulls return. “Until that day comes, do not expect this market to drop again. There’s an inverse correlation to how this works, and the tool perfectly points this out.”
Ultimately, VP says that when it comes to sentiment, it’s not where people have gone [whether long or short], it’s about where people are about to go. “Trying to predict where people are going to go is really hard to do; there’s no way you can really quantify it and I just don’t recommend people do it, but I love the tool and it’s very telling in certain ways.”
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