Strategy 1
Market Sentiment
? How do you view the forex market
Do you see it as a big mechanical matrix which is devoid of emotionsOr do you
think of it in mathematical and probability terms? Perhaps, you may even view it
as just a vast network of computers which are designed to cheat the trader sitting in
front of his or her computer and trading electronically. Most traders I know have a
love-hate relationship with the forex market, thinking that the market is, in turn,
either against them or for them
To me, the forex market is nothing more than the compressed display of emotions
at any one time emanating from currency speculators around the world. It is similar
to a big living organism, like a human being, which is made up of numerous cells
with each cell carrying out its own function and interacting with other cells of the
body, working to keep the body alive with round-the-clock chemical and biological
processes
The forex market is alive as a macro living organism, which comprises a vast
number of market participants acting out their perceptions and emotions, thus
driving the blood around the invisible entity. The participation of each player
whether the player is an institutional dealer or an independent trader, is akin to the
individual functioning of a cell, which collectively will constitute the whole
organism – the forex market in this case. Knowing what the market thinks and how
it thinks is crucial to trading success because, ultimately, the trader is dealing with
other traders out there, and needs to know what they are thinking. Even if you see
the market as an enemy, what could be better than knowing the weak points and
?being able to read the mind of your adversary
In this chapter, I shall focus on how you can better understand the market, and use
.that knowledge as one of your trading weapons