Sentiment in the Forex Market: Indicators and Strategies To Profit from Crowd Behavior and Market Extremes

Praise for Sentiment in the Forex Market

"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

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.

Trade Balance.

Treasury International Capital.

Producer and Consumer Price Indexes.

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.

Where to Look.

Conclusion.

Chapter 5. Sentiment Indicators.

Commitments of Traders Reports.

History of U.S. Futures Trading.

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. Explanation of 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.

Multiyear Forecast for the US Dollar.

Multiyear Forecast for the USDJPY.

Conclusion.

Chapter 8. Putting It All Together.

Why Most Traders Lose.

Developing a Process.

In Conclusion.

Notes.

Index.

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.