๐ COMMUNITY WINRATE VS. MARKET SENTIMENT INDEX (FGI) โ INSIGHT
Daily winrate statistics from a scalping-focused trading community reveal an interesting pattern: the winrate does not correlate linearly with the market's Fear & Greed Index (FGI). Whether the market is gripped by fear or swept up in greed, the community's performance shows fluctuations that defy a simple cause-effect relationship.
๐ Market sentiment indirectly influences trading behavior. When FGI is low (fearful sentiment), the community's winrate tends to rise. This may be because traders become more cautious and take profits earlier, resulting in a higher winrate. On the other hand, when FGI is high (greed or extreme greed), the winrate drops noticeably. During FOMO periods, traders tend to set higher profit targets, making it harder for trades to reach TP and more likely to hit SL.
๐ Average winrate by sentiment level:
๐จ Extreme Fear (FGI โค 25): 44.57%
๐ Fear (FGI 26โ46): 45.19% โฌ๏ธ (highest)
๐ Neutral (FGI 47โ54): 44.55%
๐ Greed (FGI 55โ74): 45.15%
๐ค Extreme Greed (FGI โฅ 75): 42.61% โฌ๏ธ (lowest)
๐ Scalping and expectation risk. This community trades primarily using scalping โ a style that is highly sensitive to TP/SL distance. In times of high FGI, traders may aim for larger profits, placing their TPs further away. But that also increases the risk of hitting SL due to small intraday volatility. As a result, the winrate drops, even if the overall strategy remains profitable under the right R:R ratio.
๐ง Final thoughts: Market sentiment doesnโt directly determine winrate, but it strongly affects how traders set their expectations. Understanding this psychological cycle and adjusting TP/SL accordingly can improve trading outcomes โ especially for scalpers.