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Sentiment is usually backward looking and is incorrect so frequently that it is used by professionals as a counter indicator of market direction. Daniel Loeb

The Forex Exchange market is the worlds largest financial market with an estimate daily turnover of over $5T, which is more than 25 times bigger than the US equity market. Although the FX market to some extent seems to be irrational because they don't follow the interest rate differential as expected. This could indicate that investor psychology plays a significant role in exchange rates fluctuations and there are consistently empirical evidence which suggest that sentiment may be the key to understanding this apparent irrationality.
Each and every trader will always have an opinion about where the market should go, and everyone will have their own explanation as to why the market is doing what is doing. Sentiment may drive trades however sentiment does not always translate into actual trades, so at times it can be deceiving.
It is what people actually did in the stock market that counted - not what they said they where going to do" Jesse Livermore

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aslamhammad avatar


alifari avatar
alifari 27 Mar.

Nice article, well done..

WallStreet6 avatar

Thanks for elaborating on this very important  and too often underestimated aspect of trading

marius24 avatar
marius24 30 Mar.

I use this indicator when i am looking for trend reversals. Good work.

fso56 avatar
fso56 3 Sep.

Dear all
I can add this indicator on Jforex 3?

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In the last years and in particular this year, the London FIX has been on the front page of mainstream media but not for the good reasons. Trials and allegations involving various big banks is under developing right now as they are accused of artificially fixing currency rates and rigging the FX market.
This growing scandal suggests that no matter how big is the size of the FX market the fact that the market is controlled by a small group of traders at a handful of large banks it makes the FX market prone to manipulations.
Lack of regulation is one of the other reason why FX wrongdoing is possible and what makes FX market the most opaque market of all financial markets.
Before going any further we must address some serious questions like: What is the fix?; Who uses the fix? How is the fix manipulated?; and the most important question is: How can we make money of the fix?
Although there is no doubt the London Fix has been manipulated, by answering the above questions and knowing the mechanism behind London Fix we can create a profitable strategy from a risk to reward stand point of view. It's like in Poker, if you have the possibility to know your opponent cards you know which cards…
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Ifuga avatar
Ifuga 28 June

Excellent! Now I know.

Des1 avatar
Des1 1 July

Daytrader21 are you interested in co-operating with me developing a London fix  EA

Daytrader21 avatar

Des1 I'm open to any kind of suggestions, you can fell free to send me a PM. Actually, my intention was to develop the EA using JForex and write my next article, with an easy step by step guide on how to do it.

ForexSpeaker avatar

great idea  Daytrader21 

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This article is a continuation and a reproduce of my recent blog post series were I was trying to give my own view on the major currency pairs for this year but I never got the change to finish it, so I though it may be a good idea to write an article were to cover this subject. Keep in mind this is just my personal opinion and my own plan for this year, it may or may not work out, flexibility is key, because things can change very fist in today's market.
  • USD/JPY Outlook
I'm going to give out my Fx Market Outlook for this year and I'm going to start with my favorite currency pair: Japanese Yen. I want to take the time to go through all the major currency pairs and give my personal outlook for 2014.
We know that currently the YEN pairs is all about Abenomics market policies. The "Abenomics effect" have had a huge impact to revive Japan's economy, strengthening consumer consumer spending. Although many have doubted the market policies of Japan's new Prime Minister Shinzo Abe are working very well: stock market is booming, real estate prices are rising, and retail sales are also rising. So far "Abenomics" has been a huge success, and this is very supportive for the current USD/JPY
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Schaolin avatar
Schaolin 22 Jan.

good job and good luck

Daytrader21 avatar

@Metal Mind thanks buddy I hope everything is good on your side.

Daytrader21 avatar

@Decebal & @Schaolin Thanks guys

Jignesh avatar
Jignesh 1 Feb.

Really good article. I love the USD/JPY Fractal. It scares me a bit how I've been looking at the same pairs with almost the exact same analysis! The only difference in my analysis is that I'm looking at the GBP/CAD rather than the GBP/USD. Good Job on the article and best wishes on your trades for 2014

Daytrader21 avatar

@jignesh thanks man, The thing with having a long term view is to be very flexible as this days central banks around the world tend to change and adjust their market policy to the new the economic threats, see for example recent emerging market crisis and how central banks reacted.

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Dear Readers!April is long gone and it's time for me to show you more tips regarding my favorite topic - Usage of Pure Price Action (PPA). This time I will describe some connections and dependencies between fundamental and technical trading. I WILL NOT TRY TO PROVE that DOW theory cannot be applied in Forex market (that I will do in next article). Instead I will show you that sometimes technical and fundamental analysis go arm in arm and if you notice that on time, you just might profit from that.Once again I will explain the general idea using EURUSD and USDCHF case study so you have real image of how things work for me.EURUSD M15 TIME FRAME The chart above shows you some price action regarding downtrend that occurred on EURUSD in the middle of March. I will not pay too much attention on the trend lines themselves (you can take some time and see for yourselves what possible entry points you would pick), instead I will go right to the point which in this case is gray rectangle in the middle of the chart.This is how it looks zoomed:EURUSD M5 TIME FRAMEI put the data announcement on previous chart but for you to have better reference point I also put it here. Basically what you see i…
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RobertBric avatar

Do you trade the news? Because if you do I would be interested how you do it PROFITABLY. The only way I know is to have a very fast connection to the server and fast access to the news. I don’t have either. By the way, you need to subscribe to the news!!! Only when there is a large deviation between the expected number and the released number one has a chance of predicting the direction. Otherwise it is all a lottery. Not to mention the wild spread fluctuation.

doctortyby avatar

More often I think that the Fundamentals generate high volatility that make a lot of noise in a choppy market. For example the NFP release on Friday. Price Action is strong related to the Market Sentiment that changes from one moment to another sometimes with no reason, if the professional/ institutional traders enter/exit the market. We have to create more scenarios to be able to win more than we lose so that we survive in this crysis cycles. Good luck and keep it up.

MrSami avatar
MrSami 12 May

Nice article, Good luck +2

alifari avatar
alifari 19 May

The only reason I keep track of major news is to step aside until price is back to normal volatility +1

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