the "Market Sentiment" indicator is one part of our holistic approach to identifying trading setups. It is one of many indcators of our dize indicator package and should always be used in conjunction with the other dize indicators.
💡 What is the Market Sentiment indicator?
The Market Sentiment indicator is a trend-following indicator. It visually divides our chart into three phases that are familiar to every trader - uptrend, downtrend and sideways movement. The visualization allows us to determine very quickly which phase is currently active. The indicator generates buy and sell signals for trend changes, which can be precisely matched to the asset using various filters.
💡How to use it?
The "Lookback"-parameter indicates how many candlesticks are considered for trend development. The "Sensitivity" parameter indicates how much noise we allow in the trend calculation.
In addition to changing the technical details, the indicator also includes input settings for the visual appearance. Colors for the three sentiment phases, as well as colors for the buy and sell labels can be set, making it easy to customize the indicator to suit your personal preferences.
Let's have a look:
Looking at the above example, we can clearly see how the market sentiment indicator could be beneficial to our trading. It created a "Buy" signal on the 10th October 2020 at 11297.0 USD, moving all the way up to 55705.5 USD on 19th April 2021, where it generated a "Sell" and then dropping back down to 35392.0 USD on the 25th July 2021 to create another "Buy". Of course, the indicator should not be used as a standalone buy and sell signal generator. It has to be used wisely in conjunction with other indicators and potential risk management tools. But this example shows how the indicator can bring value to your chart.
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