Sentiment Analysis for Daytraders
This is the last thing that day traders need to know to complete their trading arsenal inventory. Trading with the market sentiment requires time and it’s something that we can’t learn by reading the books. It gradually develops among the trader by the course of time.
Every single trader trades the market in their own way. Their technical and fundamental analysis is totally different from one another. You might be thinking that sentiment analysis is not required in forex trading. But if you thinking so then you are totally wrong.
For instance, your technical analysis and fundamental analysis suggest that the USD will be stronger for the next week. But the market sentiments remain bearish on the USD which ultimately weakens the USD in the upcoming week. This problem is more common to retail traders. Many best trading setups are often thrown away due to the different sentiment of the forex market.
Chart Example: USD/CHF Daily
Figure: Market ignoring technical and fundamental analysis.
So how do we learn this sentiment analysis? The simple answer is – You can’t learn the market sentiment. All the professional traders who are successfully trading different currency pairs have developed a unique way to determine the market sentiment. Over the period of time with great perseverance and dedication, you will also learn how to do the sentiment analysis. It’s more like seek sense that you will develop in your trading career.