Sentiment in the Forex Market: Indicators and Strategies To Profit from Crowd Behavior and Market Extremes (Wiley Trading) (Hardcover)

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Key Phrases: sentiment indicators, bullish bias, fundamental analysis, Wall Street Journal, Apr Jul Oct, The Power of Technical Indicators (more...)

Editorial Reviews

Product Description

Crowds move markets and at major market turning points, the crowds are almost always wrong. When crowd sentiment is overwhelmingly positive or overwhelmingly negative – it's a signal that the trend is exhausted and the market is ready to move powerfully in the opposite direction. Sentiment has long been a tool used by equity, futures, and options traders.

In Sentiment in the Forex Market, FXCM analyst Jaime Saettele applies sentiment analysis to the currency market, using both traditional and new sentiment indicators, including: Commitment of Traders reports; time cycles; pivot points; oscillators; and Fibonacci time and price ratios. He also explains how to interpret news coverage of the markets to get a sense of when participants have become overly bullish or bearish. Saettele points out that several famous traders such as George Soros and Robert Prechter made huge profits by identifying shifts in crowd sentiment at major market turning points. Many individual traders lose money in the currency market, Saettele asserts, because they are too short-term oriented and trade impulsively. He believes retail traders would be much more successful if they adopted a longer-term, contrarian approach, utilizing sentiment indicators to position themselves at the beginning points of major trends.

From the Inside Flap

With a number of firms now offering retail traders direct access to the interbank foreign exchange market, participation in the FX market has grown substantially. As a result, the amount of technical and fundamental information available to traders has increased exponentially in recent years. An area that has failed to receive the same amount of attention is sentiment.

Trading on sentiment works because market tops occur when the majority of traders are overwhelmingly bullish and market bottoms occur when an overwhelming majority is bearish. Traders that understand how to determine when a particular market is extremely bullish or bearish have an edge over those traders that follow only traditional technicals or fundamentals.

Nobody is more familiar with this situation than author Jamie Saettele. As a Technical Currency Analyst for Forex Capital Markets LLC—the largest player in the online currency-trading industry—Saettele shares his invaluable insights with thousands of traders each day. Now, with Sentiment in the Forex Market, he'll show you how to achieve unparalleled investment success byintegrating only the most effective sentiment indicators into your daily currency trading activities.

Written with the serious trader in mind, this practical guide provides you with the knowledge needed to develop a top-down, sentiment-based approach to trading the Forex market. Throughout these pages, Saettele puts the entire process in perspective, as he examines how to use Commitments of Traders (COT) reports and other important indicators to locate sentiment extremes that can lead to profitable market reversals. Along the way, he also explains how to interpret market news coverage to gain a greater sense of when participants have become overly bullish or bearish. After exploring what it takes to gauge the psychological state of the market, Saettele rounds out the discussion by addressing how to assess risk and time your currency trades using Elliott Wave theory, Fibonacci principles, and other powerful technical tools.

To profit from today's foreign exchange market, sentiment should play an important role in your trading program. With Sentiment in the Forex Market as your guide, you'll quickly discover why this is true and how you can make more money with this proven method.

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Product Details

• Hardcover: 196 pages
• Publisher: Wiley (August 4, 2008)
• Language: English
• ISBN-10: 0470208236
• ISBN-13: 978-0470208236
• Product Dimensions: 9.1 x 6.1 x 0.8 inches
• Shipping Weight: 14.1 ounces (View shipping rates and policies)
• Average Customer Review: 4.4 out of 5 stars  See all reviews (10 customer reviews)
• Amazon.com Sales Rank: #100,840 in Books (See Bestsellers in Books)

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  #17 in	Books > Business & Investing > Finance > Foreign Exchange
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Customer Reviews

Most Helpful Customer Reviews

11 of 15 people found the following review helpful:

1.0 out of 5 stars Don't be fooled by the book title!, October 31, 2008

By	Afonso Vieira "Afonso C.N. Vieira" (Singapore, Saigon, Shanghai) - See all my reviews (REAL NAME)

There are less then 80 pages about sentiment indicators in this book. Fundamental Analysis, Technical Analysis, Elliott and Fibo make the rest. In 80 pages, the author talks about 4 sentiment indicators: Magazine Covers, Headline News, COT Report, and the FXCM SSI.

I have paid over 50 USD (with shipping) for information that I can find on the internet for free.

3 of 4 people found the following review helpful:

3.0 out of 5 stars Very strong tool to consider in your trade decision making process, November 5, 2008

By	Joao Borras (Tokyo, Japan) - See all my reviews (REAL NAME)

I am a long time reader of DailyFX site and find it very useful.
One tool that caught my attention some time ago was the COT report column, write by Jamie Saettele.
The book goes further in explain the COT report itself, how to generate indicators from COT data, how to interpret it and, finally, how to use it as a tool to help trigger trades.
Well explained, with plenty of charts, it also has an introduction to Elliot Wave theory, largely used by the author in his tracking of markets.
I recommend the book because of it introduces this subject in a very straight forward way, easy to understand and apply immediately in your trading routine.

2 of 3 people found the following review helpful:

5.0 out of 5 stars Phenomenal Insight...and Perfectly Timed Considering the Market, November 4, 2008

By	Ryan Kaplan - See all my reviews (REAL NAME)

In a time when negative sentiment is overrunning the market, guidance and insight into the factors and affects of crowd behavior is critically important. Jamie Saettele has provided that insight for the forex market in his book "Sentiment in the Forex Market."

For anyone who has any desire to invest in currencies in this market, or for that matter, any market, up or down, it is crucially important to understand crowd sentiment. "Sentiment in the Forex Market" provides the guidance necessary for primarily seasoned, but also "beginning" traders, to succeed in the forex market. From in depth analysis, strategies and historical precedents, to anecdotes and easy to follow lessons, Jamie Saettele has clearly outlined the drivers and affects of crowd sentiment, and has provided a road map to understanding crowd sentiment, and using that understanding, and the indicators he discusses, to succeed in the forex market.