The study of how emotions and expectations influence financial markets is known as sentiment analysis.

Short-term market movements are frequently driven by sentiment.

Sentiment indicators help to contextualize prices by determining the current status of the market.

Tracking mood provides traders with a forward-looking view of the market rather than depending on previous data, which can lead to hindsight bias.

Traders will utilize emotion indicators to determine the direction of a trade, and then technical indications or price action will be used to determine when to enter and leave a trade.

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