A lesson in market sentiment and a few extra’s thrown in for free.

If your as sad as me, something here to entertain you over Easter.

As well forward testing and formulating a plan, over the past week I’ve been looking into market sentiment as a directional indicator.

As an overall directional indicator, many systems out there use MA’s pointing in a certain direction, crossing over, spreading apart, or the MACD crossover, crossing the central line etc. Some look at the trend on a higher time frame chart, so we are trading with the longer term trend, others the relative strengths of each currency compared to a bunch of others. Correlation, RSI, momentum indicators and so on. Whatever price action or indicator is used, there never seems to be anything taken in to account of the fundamental sentiment that is driving the market, it’s all about past information taken from price action.

One day when I am successful, I will likely start my own training course, where I will utilise all the parts that came together, to make it work for me. Basically, I will plagiarize all the best bits from from the various guru’s that have added something to my own success. As I write my blog, I feel I am starting to put together my training manual now and putting together my take on market sentiment and directional bias.

Just go through this following list and pretend it is me writing it. At the moment I’m not charging anything for it, so fill your boots.

1. How to fit fundamentals into the system.  http://www.nobrainertrades.com/2010/12/err-interpretation-of-technical.html

2. In this Trader’s Podcast episode, Raghee Horner describes how she uses the daily chart to identify the trend along with her 34 ema wave and grab candles. She also looks at currency strengths, trading strong vs weak, but it is the bit about using googlenews and googling each currency to identify the headline sentiment that we are interested in, in this lesson. Ep 221 – Dark Rob & Tomato Can Currencies

3. If you want to use a strength indicator for shorter term trading with a news feed try this free resource. http://www.currencynewstrading.com/csm-3-0-6-currency-strength-meter-download/

4. There are 3 pages to this part of the lesson. Chapter 10 – Sentiment Trading (Long Term Trading)

5. Market Perception and Risk Sentiment. Take a look at the currency outlook meter on the side of the page.  Forex Trading Strategies #3 – The Correct Trend

6. The Market Maker’s Model. For the next lesson you will have to get yourself a chart of the usd/jpy from the beginning of the year  http://forextraderoom.net/#/how-the-big-boys-trade/4583953813

My lesson isn’t fully finished yet, however hope you can see the direction I’m trying to go.

Back to my testing here’s a top guru discussing the testing method preferred by me. Click here to view

To finish off on a different note. Just a short blog posting that I just happen to read again. Maybe you will find it interesting.http://theshiningman.wordpress.com/2013/10/31/embracing-uncertainty/

 

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