Forex put call ratio indicator

forex put call ratio indicator

2: Created using Metastock Professional. This is indicative of a bearish market as there is more open interest in puts (options bitcoins ab 20 euro to sell) than calls (options to buy). You just need to hop on that knife. This website solves all the cons of the previous source. And sure enough, with call-relative-to-put buying volume at extreme highs, the market rolled over and began its ugly descent.

More elaborate mathematical massaging of the data (i.e. . As the put/call ratio pushed below the traditional bearish level, it seemed like these frenzied option buyers were like sheep being led to the slaughter. The equity put/call ratio on this particular day was.64, the index options put/call ratio was.19 and the total options put/call ratio was.72. For instance, if you see that the EUR/USD has been moving below the 50-day moving average and thus in a downtrend, and you also see that the put/call of Euro FX is 1, then the market mood is calm enough to plan for a short.

It is always good to get a price confirmation before concluding a market bottom or top has been registered. The bear market of 2002, however, has changed the critical threshold values for this indicator. There are two ways to source out this put/call ratio information. Put/call ratios provide us with an excellent window into what investors are doing. Most commonly the put/call ratio is used in combination with past data to give hints on reversals. The indicator can also be used to gauge your leverage and take profit. Confirmation Strategy (Ratio Normal One can determine the general trend of the currency pair from using a 50 or 200 period daily moving average ; if price is below the moving average it is in a downtrend and if above it is in a uptrend.