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Technical Analysis For Dummies, 4th Edition
book

Technical Analysis For Dummies, 4th Edition

by Barbara Rockefeller
October 2019
Beginner content levelBeginner
384 pages
10h 46m
English
For Dummies
Content preview from Technical Analysis For Dummies, 4th Edition

Chapter 3

Trade What You See: Market Sentiment

IN THIS CHAPTER

Bullet Looking into market sentiment

Bullet Turning up the volume

Bullet Understanding personal sentiment

Bullet Using probability to overcome cognitive bias

Your goal as a technical trader is to identify what the crowd is doing and take advantage of it — without falling prey to the market’s emotions. The primary technical tools for identifying sentiment are patterns and indicators, and the discussion of these tools forms the core of technical analysis (and this book). However, you have two other methods of measuring sentiment:

  • Sentiment indicators describe the market as a whole.
  • Volume directly represents the extent of trader participation. Volume is a powerful indicator in its own right and adds confirmation to price indicators.

Remember Sentiment and volume indicators operate on the principle that “The trend is your friend — until the end,” meaning that the crowd is wrong at price extremes and simply clueless when markets are nontrending. Sentiment ...

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Publisher Resources

ISBN: 9781119596554Purchase book