• Section: Money Guide - Category: Invest Online
• Written by Kelly Price

Do the opposite of what they do! This may sound obvious but most traders like to follow accepted market wisdom and trade in the direction of the crowd. If you want to win at forex trading you need to step away from the crowd

bull and bear markets too far and if you can spot these extremes and hit the turn you will rack up fantastic gains with low risk.

But How Do You Spot Them?

There are of course forex charts, where you can use technical analysis to look for price spikes - but this does NOT tell you how bullish or bearish the participants are - it just shows you price spikes and trends.

What you need are some sentiment indicators that show how much emotions are moving prices and when the turn is coming.

The best one of all is the CFTC Net Trader Positions and their FREE!

Not many traders use them, but this bi-weekly report is essential for all forex traders.

They show the breakdown of the futures forex markets - but these positions are just as useful when trading cash.

What do they do?

Quite simply they break the position into three main groups:

- Hedgers: These guys are the real pros and are simply hedging a cash position. There not trying to make money so are not influenced by greed or fear.

- Large Speculators: These are large funds who are mostly trend followers

- Small speculators: Everyone else

So why is the above breakdown so relevant?

Quite simply, you can look for extremes either bullish or bearish in speculative positions

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