One of the things that separates the Binary Options markets from the rest of the online trading environment is the Sentiment Indicator feature that is offered by many of the more popular brokers. In the attached graphic, we can see this indicator at the lower end of the platform. This shows how most of the platform's traders are entering into their positions, with a percentage of CALLS and PUTS. How do you use this information when trading? Does it factor into your positions at all?
Well, this sentiment thing varies from broker to broker, hence we shouldn't really rely on them totally as to how many percent of traders are in puts or in calls..... u never know at what broker the actual VOLUME traders are active... always conduct ur own analysis....
It is definitely a useful trading tool, but it does come with its flaws which can be the assumptions that are inherent. For instance, the market maker purchases are not included in this measure that only utilizes customer purchases. At least that is what I have heard.
I understand that customers are believed to be the best measures of sentiment, but there are other factors too!
When you think about the statistics (95% of traders fail)...maybe it's better to use it as a contrarian indicator. I'm not sure about it though, because I don't really look at it as i would never, NEVER rely on others when it comes to my money.