Sentiment in the forex market- Jamie saettele PDF- Indicators and Strategies to Profit from Crowd Behavior and Market Extremes- What you will not find in this book are trade setups with rigid rules or money management tips. What I hope that this book provides is a way for you to look at a specific market (and maybe others) for what it truly is: a collection of its participants that create a mind of its own, whose moves are endogenous in nature but, because of that very reason, can be exploited for profit.
Author: Jamie Saettele
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As public interest in the FX market has skyrocketed, so too has the amount of technical and fundamental research available to aspiring traders. An area that has failed to receive the same amount of attention is often considered part of the technical approach: sentiment. After the news releases are digested by floor traders, the fundamentals digested by economists, and the latest comments from the central banker are dissected, the market’s trend is still a product of underlying sentiment. That is the premise of this book. Much (if not most) of the information fed to retail traders is of little use when it comes to making money by trading. Trading is hardly as simple as buying or selling, because an economic indicator is good or bad. Similarly, the game is not as black or white as buying or selling, because price is above or below a moving average.
For one, I hope to prove that traditional approaches such as the economic indicator approach do not work. No consistent correlation exists between the U.S. dollar and U.S. economic indicators, but conventional wisdom says that the two move in lockstep. Why is this approach followed so fervently if its foundation is rooted in falsities? The reason that markets move in identifiable patterns is probably the same reason that many accept as gospel the conventional approaches to market analysis and trading that have marginally successful track records at best. That reason is the propensity for humans to follow the crowd, especially in situations as emotionally driven as trading. Although there are no doubt very successful news traders, the cost to the trader is significant: an expensive machine such as Bloomberg or Reuters, turbulent market conditions just after a news release, and most important—the emotional impulses that are our worst enemy in trading are heightened, and the ability to make a rational decision just after a news release is greatly reduced. I think that I can share with you a better (and cheaper) approach to analyzing and trading the FX market, an approach that will give you an edge, if only because you are not following the crowd.
Sentiment indicators such as the Commitments of Traders reports are followed by many market participants, but I have developed indicator with the data that are meant to pinpoint the few times each year that a market is likely to reverse. This helps to solve one of the biggest obstacles that many face: over-trading. By limiting yourself to making a decision when a specific set of circumstances are met, you are helping to solve the over-trading problem. Unconventional sentiment indicators such as news headlines and magazine covers offer some of the best trading signals every year. Not to be forgotten are more traditional technical tools such as RSI and slow stochastics. Is the conventional use, to indicate overbought and oversold levels, really the best way to go? I think that there is a better way.
What you will not find in this book are trade setups with rigid rules or money management tips. Markets are dynamic and the trader should be also. Money management will be different for everyone because everyone has an entirely different risk tolerance. What I hope that this book provides is a way for you to look at a specific market (and maybe others) for what it truly is: a collection of its participants that create a mind of its own, whose moves are endogenous in nature but, because of that very reason, can be exploited for profit.
Contents- Sentiment in the forex market- Jamie saettele PDF
CHAPTER 1 The Argument for a Sentiment-Based Approach
What Is Fundamental?
Reminiscences of a Stock Operator
CHAPTER 2 The Problem with Fundamental Analysis
How the Human Brain Works
The Myth of Economic Indicators
Gross Domestic Product
Treasury International Capital
Producer and Consumer Price Indexes
CHAPTER 3 The Power of Magazine Covers
The Death of Equities—August 13, 1979
Magazine Covers in the Currency Market
CHAPTER 4 Using News Headlines to Generate Signals
Where to Look
CHAPTER 5 Sentiment Indicators
Commitments of Traders Reports
History of U.S. Futures Trading
Currency Futures History
Reading the COT Report
Using COT Data with Spot FX Price Charts
Understanding the Data
Watching the Commercials
Watching the Speculators
Commercial and Speculators Give the Same Signal
Other Sentiment Indicators
CHAPTER 6 The Power of Technical Indicators
What Is Technical Analysis?
Keep It Simple
What Time Frames to Use?
Support and Resistance
Determining a Bias
Fancy Momentum Indicators and Overbought/Oversold
When to Get Out
CHAPTER 7 Explanation of Elliott Wave and Fibonacci
Who Was Elliott?
Fibonacci: The Mathematical Foundation
Some Differences between Stocks and FX in Elliott
Building Up from Lower Time Frames
Multiyear Forecast for the U.S. Dollar
Multiyear Forecast for the USDJPY
CHAPTER 8 Putting It All Together
Why Most Traders Lose
Developing a Process
About the author
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