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Market sentiment is the overall attitude or emotion of traders toward a market or asset, and it often drives price movement more than fundamentals or technicals. The blog explores what market sentiment is, the different types such as bullish, bearish, and neutral, and how traders can analyze it through tools like the VIX, Put/Call Ratio, and even social media trends. It also highlights how emotional reactions—like during the COVID-19 crash—can trigger massive market moves. The article explains how sentiment can be used to build trading strategies, such as contrarian and momentum approaches, while also addressing the limitations of relying solely on sentiment. By understanding market sentiment, traders can make more informed decisions and stay ahead of crowd behavior.
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