Sentiment Analysis
Studying how traders feel and how they are positioned, to judge where the market might go next.
In plain English
Studying how traders feel and how they are positioned, to judge where the market might go next.
Sentiment analysis is the third pillar of analysis, alongside technical and fundamental analysis. It asks: who is already in this trade, how crowded is it, and how might they react?
Tools range from positioning reports and surveys to scanning news and social media for tone. The classic insight: when positioning is very lopsided, the market is vulnerable to a sharp move in the other direction as trapped traders rush out.
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