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.
Risk Warning: Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved and seek independent advice if necessary.
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