A Sentiment Indicator For Trading The Euro by Philipe Saroyan
The traditional put/call ratio is used as a contrarian indicator. Here, we add a twist to enhance the ratio and use it as a coinciding indicator.
When markets are not trending, what analysis do you apply? Sentiment analysis for trading the euro is one strategy worth looking into, especially in times of nontrending markets. In this article, I will discuss a put/call ratio based on open interest. It is different than the traditional put/call ratio, which uses a summation of total volume. This enhanced put/call ratio is similar to Schaeffer’s open interest ratio (SOIR). If you net out call and put writing, it creates a better statistic for creating a trading indicator. Note that it is a coinciding indicator rather than a contrarian indicator ...