January 24, 2012
The IG Index Insight Feature - A Useful Tool Or Not?
If you have an account with IG Index, you may well have noticed that they have just created a new research tool called Insight. This is available to all customers free of charge, and it allows you to research and analyse various different financial markets, including each of the currency pairs, in some detail.
It includes things like live prices, streaming news, an economic calendar and commentary of various markets, as well as custom price charts (all on one screen), and the ability to place orders from this page as well. However one of the more interesting features is that it tells you what positions other IG Index traders are opening right now, and how they are trading.
For example when I log in and open the Insight tool, I can instantly see which UK companies have the most open positions, and which way traders are trading this stock. For instance Tesco currently appears in the top 5 list and 99% of IG clients have long positions.
You can get this data for any financial instrument as well. For instance if I open the page for the EUR/USD pair, I can instantly see that 69% of IG clients currently hold short positions. Similarly if you take a look at the USD/JPY pair, you will see that 81% of people hold long positions right now.
I'm not sure how useful this feature actually is because it has been shown that the vast majority of traders end up losing money. So just because everyone is long or short on a particular currency pair, it does not necessarily follow that the price will end up moving in the same direction.
However overall I think the Insight tool is a nice addition, and it has some pretty good features (including the live chart patterns that are forming for each and every instrument that I have just noticed as well) that I will probably use quite a lot when trading stocks and currencies.