Market sentiment is the emotions and attitudes of traders in the forex party, about a specific currency pair. Sentiment analysis is the study of the love-hate relationship with the currency pairs and traders, which in the geeky (or maybe animal lover?) forex world, is described as “bulls” and “bears.”If traders expect upward price movement of a specific currency pair, the sentiment is said to be bullish. On the contrary, if the market sentiment is bearish, most traders expect downward price movement.
Most traders have their own opinion, feeling or intuition about the markets, that’s why the prices don’t simply reflect all the information out there.
Each trader expresses her thoughts and opinions through the position they take in the market (bullish or bearish.) This helps make the overall sentiment of the market.
Just like technical analysis, there are indicators that help having an understanding about the market sentiment. We will explain all about sentimental analysis once you start drinking your Sentimental Beans.
