There is no difference between ‘Market Mood Index’ and ‘Sentiments Index’. It is just a different name for popularly known as Sentiment Analysis tool. Both help you time trades in the market and invest better. However, Sentiments Decoder has taken a step further and built its algorithm to track sentiments at each stock and index level. Where overall “Market Mood Index” is at the ten thousand feet level, “Sentiments Decoder” has dived literally upto 10feet level. From that depth anyone can understand the sentiments of the specific stock and index. Besides what else ‘Sentiments Decoder’ has to offer, here it is broken down into its various components that builds bottoms us sentiments indicator or sentiments index.
Table of Contents
Overall Sentiments Insights
Using Sentiments Decoder, you can know what is the mood of the market? Is it greed, fear or neutral? Investors and traders beat volatility by understanding whether these big up and down movements of the price in the market is temporary or long lasting. Investors don’t get worried by volatility rather brave it with sentiments insights.
Strength in the Market
Sentiments Decoder also surfaces strength in the movement of the market. If market is moving with low strength then those sentiments may not be long lasting. Hence an early warning signal for investors to stay put.
Forward looking view
Sentiments Decoder also surfaces insights on forward looking view in short to near term in the market. This helps in building confidence in the investor to take action. This early signal component have some level of prediction power however, depending on the level and tenure it’s confidence level keeps varying.
Confirmation signal
There is an element of confirmation signal as a part of overall sentiments decoder. It suggests investors to stick to their decision or flip it. So combination of forward looking component and confirmation signal, trader and investor can choose to stick to their decision irrespective of high or low volatility, spikes up or down in the markets.
While Sentiments Index helps investor, it’s essential to recognize its limitations and use it as part of a broader set of tools and analyses. Combining sentiment analysis with fundamental analysis, technical analysis, and risk management strategies contributes to a more comprehensive approach to trading and investing.
