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Summary of Sentiment in the Forex Market

Crowds move markets and at major market turning points, the crowds are almost always wrong. When crowd sentiment is overwhelmingly positive or overwhelmingly negative A- it's a signal that the trend is exhausted and the market is ready to move powerfully in the opposite direction.

Title Information

ISBN:

9780470208236

Pages:

196 pages

Format:

Hardback

Product Code:

265488

Publisher:

John Wiley & Sons Ltd

Published:

22/08/2008

Edition:

illustrated edition

Press and Industry Reviews

"This is a focused book on a key aspect of technical analysis. It takes a stand on the value of sentiment indicators in the Forex market and sticks with it. Anyone who has yet to build a firm foundation for understanding market behavior would do well to start with this book."
- ROBERT PRECHTER, Elliott Wave International

"Jamie Saettele uses clear logic and builds a strong case to shatter myths about efficient markets and conventional trading wisdom. In this thought-provoking work, which can be applied to a variety of trading markets, Saettele favors a road less traveled. This book will change more than a few minds about which tactics make sense in the Forex market."
- ED PONSI, President, FXEducator.com

"Jamie has done research that provides a totally unique perspective on the currency markets - what he has to say about sentiment and crowd behavior is essential reading for every trader."
- ROB BOOKER, independent trader and host of TraderRadio.net

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About

JAMIE SAETTELE is the Technical Currency strategist at Forex Capital Markets LLC (FXCM) in New York. He has contributed to Technical Analysis of Stocks and Commodities magazine, SFO magazine, Futures magazine, and Investopedia.com. His technical strategy is published daily at DailyFX.com. A graduate of Bucknell University, Saettele is an active currency trader employing both discretionary and systematic approaches to the foreign exchange market.

Contents of Sentiment in the Forex Market

Preface
Acknowledgments

1. The Argument for a Sentiment-Based Approach
What Is Fundamental?
Top Down Approach
Reminiscences of a Stock Operator

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

3. The Power of Magazine Covers
The Death of Equities - August 13, 1979
Magazine Covers in the Currency Market
Conclusion

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

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

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

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

8. Putting It All Together
Why Most Traders Lose
Developing a Process

In Conclusion

Notes
About the Author
Index