Sentiment Indicators

What are Sentiment Indicators? 

Sentiment indicators are tools used to measure the overall mood or sentiment of investors in the market, often used to predict future price movements.

Explanation: 

Sentiment indicators can be based on surveys, trading volumes, or the analysis of news and social media. These indicators help traders understand whether the market is bullish, bearish, or neutral, guiding their trading strategies.

Practical Example of Sentiment Indicators: 

A trader uses the Bullish Percent Index (BPI), a sentiment indicator, to gauge the percentage of stocks in a bullish trend. A high BPI suggests that a majority of stocks are bullish, which might indicate an overbought market.