Bulls and bears - diving into market sentiment
That would have been a cool movie about our lives, don’t you think? Just a bunch of people on a large room talking about bulls and bears non-stop. Who would watch that?
I would because it would explain a very important part of modern trading – trading sentiment.
Bulls and bears, as weird as that sounds always, ALWAYS define our trading habits. Bulls and bears are practically the indicators for the conditions that we are trading in. And we have to live with them and respect them as sometimes we can be in trending market and still lose the trade. Why? Because we didn’t look at market sentiment.
Well, my friends. Market sentiment is the sum of all of traders’ opinions, so to say. As forex traders you need to understand that the market condition is pretty much a combination of all of the traders’ opinions. What everyone thinks is added up and that is what is forming the conditions of trading.
And this is what you really need to count on.
You also need to ask yourself questions like – are the market bullish [going up]. Are traders bearish today? These are the questions which are going to help you determine what you need to do next. Although this type of analysis is not going to help you find precise entry points, it can still help you escape huge losses.
And when you combine sentiment analysis with technical AND fundamental analysis you are going to become unstoppable.
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