Market sentiment index


The only trouble is that you never know in advance what kind of position has a chance to become strategic, therefore, taking the small move, the trader is usually in a hurry to take profits. On the hourly chart is always enough of these guidelines that suggest the trader where to stop. In most cases, then he makes sure that the right thing, but sometimes, closing position, wistfully watching as the market continues to move in the same direction, only now to join this course is much more difficult. An attempt to catch up with the market often just ends up disappointing result.

Is it possible to somehow bridge the gap between strategic trading on the daily charts and short positions in day trading.

Index and not the!

Attempts to use the various oscillators and build their own moments to trap start new trend has gradually led to the idea that you and I would like to propose in this article. The basic meaning of the proposed approach is that it is important not only well-chosen indicators, but also the right to use it in accordance with the purposes of trade. The current understanding of the behavior of the new indicators determined the name - The index in market sentiment.

When the schedule of the exchange rate is, say, on a bullish trend, and it shows the ups and downs, but each time with a new rise ends above the previous high, and another fall is not as deep as the previous one. This means that there is an upward trend. As well as all-cue trend, it will sooner or later broken, and then it turns out that the breakout trend took place after one of these lifts, accompanied by a turn down. What kind of a turn down end break of the uptrend, no one knows. If the schedule is set after climbing down - it's just a setback. When rollback led to a breakthrough and the market trend has made significant progress down, we can only regret not wait too short.

Follow the same simple truth known to every trader - open only on the trend - in real life, too, is not so simple. When the new (in these arguments - bearish) trend definitely confirmed that he is the trend, it is certainly ripe for a pullback. A good trend and good demand kickbacks. So, which opened with the trend, just as easy to get loss, as it opened against the trend. It is also well known to every trader.

In this sense, the plot itself is a lagging indicator of price trends. And on the intraday charts is felt most keenly. It would be nice to have an indicator that would allow early rollback to say whether this is just a pullback correction of the underlying trend, or is it the beginning of the fracture. Because miracles do not happen, then this indicator also should not exist. But trying to find the index, which would have a property with sufficient reliability (statistically, of course, sense) show such start to reverse the trend - is a reasonable goal.

This indicator, in terms of intraday-trader must have two properties: 1) the time (without delay) to indicate their turn when the market starts to go in the opposite direction, and 2) after a long time to grow or to be in the high (low) values for the market to form an uptrend (respectively - to decline in a downtrend).