The Market Sentiment

Trading the Market Sentiment

The Market Sentiment is a measure of what the majority of traders anticipate about the future course of the market.

The Market Sentiment actually refers to the psychology of the market. The market sentiment can be either: Bullish, Bearish or Neutral. Since the USD is involved in 80% of all Forex transactions, the Forex market sentiment is mainly focusing on the US Dollar.

General Market Sentiment Tools

Here are some popular Forex Market Sentiment tools, available on the internet:

Dukascopy Market Sentiment Tool

https://www.dukascopy.com/swiss/english/marketwatch/sentiment/?ibref=8411

FxStreet Market Sentiment Tool

https://www.dailyfx.com/sentiment

Oanda Forex Open Position Ratios

http://www.oanda.com/forex-trading/analysis/open-position-ratios

FXCM Speculative Sentiment Index (SSI)

https://www.fxcm.com/services/forex-trading-tools/ssi-speculative-sentiment-index/

 

Forex Correlated Sentiment Indicators

These are some important Forex Market Sentiment indicators:

  1. COT Analysis (Currency Futures)
  2. Open Interest (Currency Futures)
  3. Put/Call Ratio (Currency Futures Options)
  4. VIX Volatility (Info here http://forex-investors.com/index.php/forex-market/cboe-volatility)

 

 

Commitment Of Traders (COT) Report

The COT report is published weekly by CFTC and provides traders with detailed information about the opened positions in the US futures market.

www.cftc.gov/cftc/cftccotreports.htm

The COT Report presents three categories of opened positions:

  • Commercial (Not-Important)

Positions of traders who use futures contracts for hedging against market risk.

  • Non-commercial (Very-Important)

Positions of participants who speculate the market, such as investment banks, hedge funds, etc.

  • Non-Reportable (Not-Important)

Positions of small speculators, such as retail traders.

The Importance of the COT Report

The COT report measures the market sentiment of the big players in the currency futures market. Currency futures constitute a centralized market.

In order to determine the market sentiment, you need to compute the difference in volume between the long and short positions. More about COT Reports here:

http://forex-investors.com/index.php/forex-market/cot

 

Other Ways to Measure the Market Sentiment

There are also alternative ways to measure the market sentiment:

  1. Business and Consumer Confidence Surveys
  2. Currency Indexes (for example the US Dollar Index), info here: http://forex-investors.com/index.php/forex-market/indices/usdx
  3. Market Response after News Release
  4. Market Response after the breaking of an Important Support or Resistance Level
  5. Divergence between News Release and Price Action

 

Business & Consumer Confidence Surveys

There is a great number of business and consumer confidence surveys released periodically to the general public. Here are some of the more important economic surveys:

Chart: EURUSD vs the European Sentiment Index (1990-2016)

EURUSD

More: » Breakout Strategy | » Forex Fundamental Analysis | » Carry Trading | » EA Builder Tester

REVIEW BROKERS: » FBS review | » HotForex Review | » XM Review | » FXCC Review | » IC Markets Review | » Dukascopy Europe

Trading the Market Sentiment

ForexExperts.net

Enter the Compare Zone

Compare Forex Brokers Based on the Algorithms of the Forex RatingFormula 5.0..

Compare Zone

Consisting four (4) Rating Factors {Safety, Competition, Options, Technology) -Maximum score is 100%

Review Brokers

Review ECN/STP Online Forex Brokers..

All our plans are free to join, lasting permanently, and most importantly we will never widen your trading spreads, as other IBs do. That is our guarantee.

Trade Systems

A trading system is a set of specific processes and rules that can help traders to optimize their trading process, or to develop automated trading strategies (EAs):

» EA Builder for MT4 and MT5

» Compare EA Systems

» Market Sentiment

» Forex PAMM Accounts

Forex Ratings

Forex Broker Ratings Powered by the Revolutionary RatingFormula 5.0Forex Broker Ratings Powered by the Revolutionary RatingFormula 5.0 (?)

» XM Rating

» FXCC Rating

» IronFx Rating

» HYCM (HYMarkets)

» HotForex Rating

» ICMarkets Rating

» FxGlobe Rating

» Dukascopy Europe

(+) All Forex Ratings

Dukascopy Rebate

Dukascopy 30% Trading Rebate for the 1st month via the following Rebate Link:

  • Regulated Forex Broker
  • 0.3 pip average spread plus $4.8 commissions per round lot
  • Huge liquidity via the Swiss SWFX Market
  • JForex Automated platform, FIX/API
  • PAMM Accounts
  • Many Monthly Contests / Social Trading
  • Minimum Account is $100 (Dukascopy Europe)

► Register with Dukascopy via this rebate link and get automatically a 30% Trading Rebate for your 1st month

Register with Dukascopy Europe from this link and get 20% Rebate for your 1st month of trading..

Go to top