This is a popular trading approach to the most actively traded market in the world. With a number of Internet services now offering retail traders direct access to the interbank foreign exchange market, retail participation in this area is growing dramatically. But in order to profit from this opportunity, traders must be prepared. In "Sentiment in the FOREX Market", analyst Jamie Saettele presents new ways to look at and use traditional tools such as the Commitment of Traders reports and oscillators in order to gauge sentiment extremes that lead to market reversals. He explains how to time trades with Elliott Wave theory and pivot points and see through the mainstream financial media's 'fitting' of news to price action.Written in a straightforward and accessible style, this book will put traders in a better position to succeed as they use sentiment indicators and strategies to profit from crowd behavior and market extremes.
Preface.Acknowledgments.Chapter 1. The Argument for a Sentiment-Based Approach.What Is Fundamental?Top Down Approach.Reminiscences of a Stock Operator.Chapter 2. The Problem with "Fundamental" Analysis.How the Brain Works.The Myth of Economic Indicators.Nonfarm Payrolls.Gross Domestic Product (GDP).Trade Balance.Treasury International Capital (TIC).Producer and Consumer Price Indices (PPI, CPI).Conclusion.Chapter 3. The Power of Magazine Covers.The Death of Equities-August 13, 1979.Magazine Covers in the Currency Market.Conclusion.Chapter 4. Using News Headlines to Generate Signals.The 'Dollar' and 'Surge' Search.The 'Dollar' and 'Plunge' Search.The 'Dollar' and 'Plummet' Search.Media Prognostications.Where to Look.Conclusion.Chapter 5. Sentiment Indicators.Commitments of Traders Reports.History of Futures Trading in the US.Currency Futures History.Reading the COT Report.Using COT Data with Spot FX Price Charts.Understanding the Data.Watching the Commercials.Watching the Speculators.Commercial and Speculators Give the Same Signal.The Approach.Open Interest.Other Sentiment Indicators.Conclusion.Chapter 6. The Power of Technical Indicators.What Is Technical Analysis?Keep It Simple.What Time Frames to Use?Support and Resistance.Determining a Bias.Fancy Momentum Indicators and "Overbought/Oversold".When to Get Out.Chapter 7. Introduction to Elliott Wave and Fibonacci.Who Was Elliott?Fibonacci: The Mathematical Foundation.Ratios.Specific Setups.Some Differences between Stocks and FX in Elliott.Building up from Lower Time Frames.Multi-Year Forecast for the US Dollar.Multi-Year Forecast for the USDJPY.Conclusion.Chapter 8. Putting It All Together.Why Most Traders Lose.Developing a Process.In Conclusion.Notes.About the Author.Index.