Market Sentiment
Nick Name
Investor Sentiment
Market sentiment refers to the overall attitude of investors about a security or the financial market as a whole. It is the feeling or tone of a market as demonstrated through the activity and price movement of the securities traded in that market. Sentiment drives demand and supply, thereby leads to price movements. Traders combine market sentiment indicators with trading frameworks or other forms of analysis to refine entry and exit signals. The key to obtaining maximum returns is to assess the mood correctly and act on it faster.
NOTES
- Market sentiment is not always based on fundamentals; Market sentiment is about feelings and emotion, while fundamental value is about business performance.
- It influences the technical indicators utilized by day traders and technical analysts to measure and profit from short-term price movements often caused by investor attitudes toward a security.
- It is important to contrarian investors who like to trade in the opposite direction of the general consensus.
POPULAR SENTIMENT INDICATORS