Gauge the market Sentiment

How to Measure Market Sentiment?

This is everybody try to do before opening and closing trades, and its very important too we cannot ignore it at all.

To measure the market sentiments, all major pairs and their crosses checking is the easier and faster way for intraday traders/ for day traders/for End of the day analysis.

but to weekly / monthly traders its might not works, they need more information like interest rates, fundamental, commodities analysis and economic cycle, but again this type of approach helps them for making better entry point for their monthly weekly trades.

in simple words what other currencies are doing around USD is knows as major cross pairs, and then what its counter currency doing around its own counter currency will give you for information than any indicators for intraday trading.

Some logic is here..
eg: EURJPY

first check where EUR is standing now, its simple check EURUSD if its in uptrend EUR is strong/ if down its weak.
second check where is JPY standing at current time, its also simple check USDJPY if its in uptrend JPY is weak, if its in down trend JPY is strong.
This will help you to know EUR strength and JPY weakness or its reverse information, and this eg is apply on all major pairs. And also applied on its crosses.

you may do this checking(grading) on key time frames 1H 4H and daily. if its mix also don't mind to do it on weekly.

Forex is game “a price action”, don’t run behind any fancy Red,Yellow,Green traffic lights.
Forex is like a Car, don’t drink and drive, u must know then drive.

This I post it separately because many friends would like to know about it. it natural analysis and never fail.

interesting thread. hopefully it gains traction. I trade futures only so I just look at L2 for gauging pa when it reaches key S/R levels. subd to see if there will be any great content on this.

EDIT speaking of P/C ratio I can post daily during US open the ratio on the currency ETF's and currency options to do my part to gauge US open sentiment. Those who trade forex curious where you can find flow/setiment w/o spending a bundle on CitiFX platform

Another way to look at PA

but recommend some sites where these data is available

Open Interest
Put call Ratio and other terms

I know there is a free site that post articles daily of CITIFX flow data but its several hours behind. I will try to remember what it was called.

I think a better way to guage market sentimate would be to look at the actual index, not a pair. Some brokers like liteforex offer this.

In your example with EURJPY. If you look at the EURUSD and its bullish, that doesnt have to mean that the EUR is strong, it could also mean that the USD is very weak, or at least not as strong as the EUR. Same think with USDJPY, if its bearish, that could also mean that the USD is very weak or weaker than the JPY.
They can both be weak or bearish, just depends on which one is the weakest.

Ive been researching this for a while and have had some good results following it. You need to find the strongest and weakest index, pair them together and trade them.

Im not saying that your example above wont work, i just think you would get a better view of market by looking at the actual index of EUR and JPY.

May I ask where do you get those indexes from?For example Dollar index or Euro Index

Thanks

They are included in a few MT4 brokers, SigTrader and Liteforex were the last couple ones i heard about.

Ive also seen good tools on other forums, not sure if i can post links here. But they use the TMA to get the trend with very accurate results.