How to define market sentiment?
Page 1 of 733 123 LastLast
Results 1 to 10 of 325

Thread: How to define market sentiment?

  1. #1
    Hi traders,

    I am still learning about this market sentiment thing and I need help from seasoned traders just like you.

    It's been 2 weeks I've tried to specify the market sentiment, but I found some difficulties. I want to ask something:

    If there are great news for the side, will it makes the sentiment neutral?
    I think the answer of the question depends upon what news it's because it possibly having distinct impact, right? But then How can we say it have distinct degree impact (ex. A news is thought of having more impact that the other one) so that the market sentiment remains strong for one direction?

    Thank you for your help

  2. #2
    Risk, Time, Return

    The 3 major factors that any cash manager is worried about. You could write a lot on this but also to keep it simple as the signature indicates, put yourself in the shoes of the only people who hold weight from the market; Institutional investors, Hedge Funds etc (people that move the market and have continuous market exposure) and ask yourself a simple question with the above 3 parameters in mind; Where is the money running to now, this week, this monththis year? .

    Another suggestion; When there's risk of a systemic banking crisis no one (that matters) is much likely to care how many new jobs were created in Australia last month. Bloomberg, Reuters etc are great to get an notion of what the planet will be waking up to on every day, however you need to be a bit smarter than to simply assume positive headlines = a bullish market, and realize that simply because it's all positive about the news feeds will not make it a buying opportunity, doesn't mean it's not either. Frequently it will be the time for the big guys to sell, especially when the market is on highs.

    Another instance; intraday belief could push the market higher for whatever reason (expansion hype, market rumors whatever) But this might only provide moderate term investors deal prices where to sell.

    Just takes practice and monitoring. Watch responses to news releases and ask yourself? How? Who?

    There's no golden rule or formulation, or indior that can tell you exactly what the sentiment is, you need to develop some street smarts. It is really just a huge game and information is not on our (retail traders) side. The biggest hint I can give you is the simple fact that 95% of traders lose. I would hazard a guess that 95% of traders are also exposed to the information and so lead to the slaughter, over and over.

    Again, all matters are these crucial 3 phrases and the major market participants. Risk, Time, Return.

    Think, Learn, Adapt, and keep it simple. Concentrate on a single pair as you're learning. What moves it? What is moving it?

    All that's futile without pointing out that, occasionally (and often) items will need to go down before they could go up and vice versa.

    Good luck.

  3. #3
    Wow, that is easy explanation, clean, and very pleasant. Thank you a lot

    as a conclusion I try to underline the main factor:

    Why? How? Who?

    What moves it? Today, what's moving it? : This thing has to be known it gives a trader insight.

    Where's the cash running to now, this week, this month, this year? . : When we understand this thing, we could estimate the risk of a trade. Pick on the one.

    The biggest hint I can give you is the fact that 95% of traders lose. I would hazard a guess that 95% of traders are exposed to the exact same information and therefore lead to the slaughter, over and above. : Analyzing information on what the public media gives won't make a fantastic transaction in the long run. Get clever.

    You need to be a bit smarter than to simply assume positive headlines = a bullish market, and realise that simply because it's all positive on the news feeds does not mean it is a buying opportunity, also doesn't mean it's not either. Frequently it will be the ideal time for the big guys to sell, especially when the market is on highs. : Think like the big guys do, dependent on where the money goes.

    Intraday sentiment could push the market higher for whatever reason (growth hype, market rumors whatever) But this could simply provide medium term investors deal prices at which to sell. : Once you think like the big guys, like the big guys do, now behave.

    Risk, Time, Return: Traders which produce big move must considered this 3 point. So most likely they'll trade when there's a fantastic risk-return ratio. And that is is our opportunity.

    Thank you...a guy!

    Good luck too

  4. #4
    In the beginning the market sentiment is simple, because there are just two circumstances.

    Risk Appetite / On, normally the dollar bearish
    Risk aversion / Off, normally the dollar bullish

    still not simple enough?

    Just examine the commodity currencies GBPAUD and AUDJPY (equally have inverse correlation). Under ordinary conditions, meaning there's no intervention or deadly data from 1 facet:

    if GBPAUD upward (AUDJPY down) then the opinion is'risk aversion.
    When GBPAUD down (AUDJPY up) then the opinion is'risk appetite.

    You choose which TF you would like to perform with.
    My advice if you are in H1 afterward as a manual is D1.

    Simple.

    Btw, today asia is a little'risk aversion.

  5. #5
    Quote Originally Posted by ;
    Risk, Time, Return: Traders that produce big move must believed this three point. They'll trade whenever there is a fantastic risk-return ratio. And that is is our opportunity.
    The major purpose is risk management, this is'their main focus, this is the reason why the Euro scenario will always take priority over Growth , when you remove that risk, then it'll be a contest to ch the expansion train and investment will flow to growth markets like commodities and volatility again (which of course affect currencies). People will attempt to expect this transition before it happens in expectation of getting in first, which is pretty much the story of the past couple of months in the current market. But remember it is always a contest for the best price. Risk/ return is correct. But Risk management will take priority.

    It's not black and white, remember you will find short term players, medium term players, long-term players constantly. Duration will liquidate to medium term, who liquidate to term.

    Once you combine those 3 points and then use it to exchange the next key factor is liquidity... But thats another story.

    No worries.

  6. #6
    Quote Originally Posted by ;
    when GBPAUD upward (AUDJPY down) then the opinion is'risk aversion.
    When GBPAUD down (AUDJPY up) then the opinion is'risk appetite.
    In hindsight .

  7. #7
    Quote Originally Posted by ;
    In hindsight yes.
    hehe. . Is life? Hope all is great with ur exam

  8. #8
    Quote Originally Posted by ;
    The major purpose is risk management, that is'their principal focus, that is the reason why the Euro situation will take priority over Growing , when you eliminate that risk, then it will be a competition to ch the growth train and investment will flow into growth markets such as commodities and volatility again (which of course affect currencies). Individuals will attempt to anticipate this transition before it happens in expectation of getting in first, and it is pretty much the story of the last couple of months in the current market. But remember it's always a competition...
    Alright. Then, the Risk, Time, and Return is also arrive in order?

    For the time being I'll stuck with this market goes . Then I'll go for this another story. And when trouble comes again, I will be asking for help again

  9. #9
    Quote Originally Posted by ;
    In the start the market sentiment is straightforward, since there are only 2 circumstances.

    Risk Appetite / On, normally the dollar bearish
    Risk aversion / Off, normally the dollar bullish

    still not easy enough?

    Just look at the commodity currencies GBPAUD and AUDJPY (equally have inverse correlation). Under normal conditions, meaning there's no intervention or fatal data from 1 side:

    if GBPAUD upward (AUDJPY down) then the sentiment is'risk aversion.
    If GBPAUD down (AUDJPY up) then the sentiment is'risk appetite.

    You decide which...
    Halo gsantri,

    the problem when utilizing chart is the fact that it'll be too late when the sentiment is already change. And also it'll be a fractal difficulty when you start looking into higher TF...

  10. #10
    Quote Originally Posted by ;
    Halo,

    the issue when using chart is the fact that it'll be too late when the sentiment is already change. And it'll be a fractal difficulty when you look into high TF...
    The very sensitive instrument on the market is commodity.
    I discovered GBPAUD and AUDJPY consistently leading a little.

    Just observe the charts, specify the supply/demand area or S/R inside it and receive the feeling.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
This website uses cookies
We use cookies to store session information to facilitate remembering your login information, to allow you to save website preferences, to personalise content and ads, to provide social media features and to analyse our traffic. We also share information about your use of our site with our social media, advertising and analytics partners.