Ziwox Retail Sentiment Expert Advisor
Description:
The Ziwox Expert Advisor (EA) harnesses the power of retail trader sentiment data from the Ziwox API to make strategic contrarian trading decisions. The premise is straightforward: when the majority of retail traders are taking long positions, it may be time to sell, and vice versa. By integrating sentiment analysis with moving average trend confirmation, this EA offers a thoughtful approach to trading that reflects the collective psychology of the market.
For implementation details and code, refer to this MQL5 Article.
Why Retail Sentiment Matters:
Retail trader sentiment offers insight into the positions and biases of individual traders in the market. It's well-recognized that retail traders often find themselves on the wrong side of market movements due to emotional decision-making, inadequate risk management, or exaggerated reactions to news events. By assessing the long and short ratios of retail traders, we can adopt a contrarian strategy that frequently aligns with institutional trading flows and overall market trends.
Benefits of sentiment analysis for traders include:
Identifying market conditions that are overextended.
Spotting potential reversals early on.
Enhancing technical analysis with insights into trader behavior.
Minimizing risk by steering clear of crowded trades.
How the EA Works:
This EA collects retail sentiment data via the Ziwox API and integrates it with a moving average crossover filter:
API Integration:
The EA utilizes the GetAPI function to send requests to the Ziwox endpoint, retrieving sentiment data in JSON format, which includes essential fields like Retail Long Ratio, Retail Short Ratio, and Risk Sentiment. This data is then parsed into an array (APIJSON) using JsonDataParse.Contrarian Logic:
If the Retail Long Ratio is 60% or higher, and the fast moving average is above the slow moving average, the EA considers a sell trade.
If the Retail Short Ratio is 60% or higher, and the fast moving average is below the slow moving average, the EA considers a buy trade. This approach ensures that trades are taken contrary to retail sentiment while still adhering to technical trend confirmation.
Technical Filter:
Simple moving averages (iMA) with user-defined periods (shortMAPeriod and longMAPeriod) filter trades, executing only those that align with the broader moving average trend.Automated Trading:
When AutoTrade is enabled, the EA autonomously opens orders, checks for new candles via IsNewCandle(), and prevents duplicate trades with OrdersTotal().Visualization:
The EA displays sentiment indicators on the chart using DrawSentiment and ButtonCreate, clearly representing retail long and short ratios in a color-coded format—green for long positions and red for short positions.
Key Code Components Explained:
GetAPI: Manages API connections to Ziwox, including rate limits, retries, and saving data to a JSON file.
JsonDataParse: Reads the JSON file, extracts sentiment values, and stores them in the APIJSON array for trading logic applications.
OnTick: Examines conditions at each tick, applies contrarian logic with the moving average trend filter, and executes orders if the criteria are satisfied.
DrawSentiment & ButtonCreate: Visualizes sentiment directly on the MT4 chart for immediate insights.
IsNewCandle: Ensures trades are only assessed once per new candle to prevent multiple executions on the same candle.
Usage Instructions:
Place the EA in the Experts folder of MT4.
Input your Ziwox API key in the APIKey field.
Adjust the shortMAPeriod and longMAPeriod as needed.
Set AutoTrade to true for fully automated trading.
Load the EA onto any symbol chart. It will gather sentiment data, visualize it, and trade based on the contrarian strategy.
Conclusion:
This Expert Advisor combines behavioral finance insights from retail sentiment analysis with technical indicators to create a straightforward yet powerful contrarian trading strategy. By monitoring the collective biases of retail traders, the system aids in identifying potential market reversals and avoiding overcrowded trades, thus providing an advantage to disciplined traders.