How to define market sentiment?

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

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.

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

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.

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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.

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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.

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

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In hindsight .

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In hindsight yes.

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hehe. . Is life? Hope all is great with ur exam

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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...

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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

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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...

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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...

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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...

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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.

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The most sensitive tool on the market is commodity.
I found GBPAUD and AUDJPY always leading a bit.

Just observe the charts, specify the supply/demand place or S/R in it and get the feeling.

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Hmmm... you are right.

It is new to me. It is quite interesting actually...

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Okay. Then, the Risk, Time, and Return is also arrive in order?

For the time being I'll stuck with this market moves first. I'll go for that another story. When trouble comes again, I'll be asking for help

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when you begin thinking which order then you're already hoping to systemize it. Don't do this... This can bring you unstuck, you need to maintain an open mind, all factors will be present consistently. How does put it rigidity kills.

Just focus on what's moving your pair and watch. As time passes the rest should present itself and new inquiries will lead to new replies. Google is your friend. Let the analysts do the hard work for you. You don't have to become an expert in fundamentals or macro economic behavior. However, any knowledge is knowledge that is good.

Like Gsantri said, you just need to have a sense of how things work, a few individuals can do this with charts alone. Depends on your egy and what suits you personally and what you're comfortable with.

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When you start believing which order then you are already trying to systemize it. Do not do so... This will bring you unstuck, you need to keep an open mind, all variables will be present always. How does place it rigidity kills.

Just concentrate on what's moving your pair and see. As time passes the rest must gradually present itself and new inquiries will lead to new answers. Google is your very best friend. Allow the analysts do the work for you. You do not need to become an expert in fundamentals or macro economic behaviour. However, any...

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well said

Okay, thanks for the advice

This is not the holy grail but you might look at correlations on the market

look at the equity markets and the way they're doing

risk on the markets at the green the yields higher
risk off the markets at the crimson the yields lower

risk on usd bearish (signifies positve correlated currencies aud, gbp, eur should go higher, and conversely jpy,cad,chf the chart should appear bearish

risk off usd bullish (and jpy is tricky cause it tends to appreciate too, all safe heavesn appreciate, and gbp, aud, eur move lower

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Originally Posted by ;

this is not the holy grail but you could Consider correlations from the market

Consider the equity markets and Also how they are Doing

risk about the markets in the green the Returns Greater
risk off the markets in the Crimson the yields lower

risk on usd bearish (Signifies positve Associated currencies aud, gbp, eur should Go higher, and conversely jpy,cad,chf the chart should look bearish

risk off usd bullish (and jpy is tricky cause it tends to Love Also, all Protected heavesn Love, and gbp, aud, eur Transfer lower

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Wow, thanks for the Info

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btw, now asia is a bit'risk aversion.

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Risk aversion / risk off sentiment continued to London session up to now.

Virtually all http://finance.yahoo.com/intlindices?e=europe now in RED
.
https://www.forexsoutheast.asia/atta...1683716135.png

Attempting to define market setiment right now is like trying to define the moods of a bipolar individual

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risk aversion / risk off belief continued to London session up to now.

Virtually all http://finance.yahoo.com/intlindices?e=europe now in RED
.

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Ok, That's a good case for market sentiment through correlation with stock.

When you see that the London stock, it is down, but on the other hand the US stock is down.

It's both bad news. How we decide the sentiment? neutral?

Of course if we'll realize that the EURO at drawback because the debt crisis. The sentiment is currently going for USD. I know really it is not that easy to determine. It's only a rough anlysis...

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Ok, That is a fantastic example for market sentiment through correlation with stock.

When you find the London stock, it is down, but on the other hand the US stock is down.

It is equally bad news. How we decide the opinion? neutral?

Of course if we will see that the EURO at drawback since the debt crisis. The opinion is currently about for USD. I know it is not that simple to determine. It is just a tough anlysis....

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Here is another illustration of'risk on / risk hunger / us dollar bearish' when us data came out positive on last Friday. .

https://www.forexsoutheast.asia/cryp...e-candles.html

I don't wish to over-complie it, but that is a good connection, worth keeping an eye during the day. Oil and copper are indiors of risk, rising prices is risk off, decreasing prices is risk on.

Http://finviz.com/futures.ashx

Also bond prices are important, particularly treasuries (t-bills), decreasing prices is usually risk off, and vice versa. These are displayed in above link.

As mentioned by others keep your eye on equities, particularly the SP 500. Also in currencies, AudJpy is a good one.

Its better to have a look at a wide range of indiors because every one may be affected by matters unrelated to risk appetite, ie oil prices may also be influenced by supply disruptions.

Hope I haven't muddied the water! Good Luck.

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Here is another example of'risk on / risk hunger / us dollar bearish' when we information came out positive about last Friday. .

Https://www.forexsoutheast.asia/gene...ot-thread.html

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hey, it's a really good illustration btw. Thank you for the explanation.

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I do not want to over-complie it, but that is a fantastic link, worth keeping an eye during the day. Oil and copper are great indiors of risk, rising prices is usually risk off prices is usually risk on.

Http://finviz.com/futures.ashx

Additionally bond prices are significant, particularly treasuries (t-bills), decreasing prices is usually risk off, and vice versa. These are displayed in preceding link.

As mentioned by others keep an eye on equities, particularly the SP 500. Additionally in currencies, AudJpy is a great one.

Its best...

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Hello nate! Thank you for the link! Are gold and silver also indiors risk?

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Hello nate! Thank you for the link! Are gold and silver too indiors risk?

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Silver has industrial uses in addition to being used as an advantage, so not so much.

Gold is traditionally regarded as a safe harbor and inflation . This can be a risk indior in times that are . However it has a tendency to move inversely to the dollar (as it's priced in dollars).

I personallly do not utilize either at this moment in time, but this might vary in various market conditions, i.e. when the brown stuff hits the fan.

Other individuals may have different views.

Thanks to all

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Originally Posted by ;

Hi traders,

I'm still learning about this market sentiment item and I want help from seasoned traders like you.

It has been two weeks I have tried to specify the market sentiment, but I found a few issues. I need to ask something:

If there are great news for the side, will it makes the sentiment neutral?
I feel the answer of the query depends upon what news it has because it possibly having different effect, right? But How can we say it have different degree effect (ex. A news is considered having more impact that the...

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in regards to fundamental news, you can't figure out how the market should react to each event. I think, as you said, that it is depended on the importance of the news (by way of example NFP is significantly important than the ISM) and the expectations that the markets have from the information. The more the expectations are higher, the greater are the possibility for a reaction and disappointment. But there is a flood of information and the market reacts with a favorable sentiment. The bottom line is that you can't place this in a formula that will tell you the market's sentiment.