Today we would like to discuss Bullboard Sentiment
A proficient stock market analysis requires investors to understand the overall attitude of a particular security or bigger financial market. Also, market sentiment brings you one of the most important skills in trading activity – discipline.
So, what is sentiment? Sentiment is the subjective opinion of the stock market participants concerning the feeling of the overall tone of a particular stock, exchange-traded fund (ETF) or market. Sentiment shows the market-crowded opinion, revealed by the price movements.
Generally, there are two types of sentiment. The first is indicated by the percentage of the total number of participants who have revealed their preferences regarding future market movements. This type of market sentiment is indicated in three ways: buying, selling and holding and shows particular trends without crowd and information noise. It tells the investor what to do during a particular time period. The second type is personal equity sentiment, which indicates a strategy and trading plan. It allows investors to test their ideas and analyze trading performance as a result.
Stock, ETF and market sentiment can be influenced by a variety of factors, including market psychology, technical indicators, fundamentals and news.
Why is market sentiment so important in performance?
The greatest mistakes a trader or investor can make are a lack of discipline and a trading plan. This mistake costs them precious time, money and in most cases, retirement savings. To enhance trending skills and bring discipline to an activity, one has to follow a proven trading strategy as well as all of that strategy’s rules over and over again. Unfortunately, it is common for traders to have discipline and planning issues.
What should you do to avoid these problems?
Chris Vermeulen, a trader with more than 15 years of experience, once said, “The key is to react and execute. Trade first with your proven strategy and then once you are done you can think about what and why things did what they did all you want.”
To help, we’ve created a personalized planning tool that calls Sentiment by Bullboard. It trains you to plan your trade long before opening the position and brings discipline to your decision-making process. It also helps you to develop your own trade system that is easy to execute without opening a position-in-fact.
As we mentioned earlier, the first type of sentiment can be associated with buying, selling or holding. It helps to include a comment with your sentiment that describes the reason for your decision. This tool provides you with the key to eliminating any planning and discipline problems. As a result, you can have total confidence in your system, which means you won’t have to stop after the fact to alter your trading decision.
So, how can the tool be applied to your trading? If you’ve added a buy sentiment and the stock goes down at defined time periods, then you’ve probably made a mistake in developing your strategy and this tool will signal you to avoid an opening position and to re-evaluate your strategy. If you’ve added the correct equity sentiment and the stock moves directly as you had planned, then it signals you to open a position. If you’ve done everything correctly, you can prove the existing strategies on other equities as well.
What is sentiment ratio?
When sentiment is added to equity, the tool helps you to identify the accuracy of your prediction as well as its success. When sentiment is added to the application, it records the time, market value and your opinion (i.e. buying, selling or holding). If you’ve added a buy sentiment and the price increases, the app rewards you with a point. If you’ve added a sell sentiment and the price decreases, the app does the same (i.e. rewards you with a point). Finally, if you’ve added a hold sentiment and the price doesn’t change more than 5%, the app again rewards you with a point. To summarize, the app calculates your sentiment ration. While you are trading you are teaching yourself how to increase your sentiment ration and therefore, your performance.
The sentiment ration is an important part of your portfolio and diary because it is a universal indicator which helps you track your performance. It doesn’t matter what kind of analysis you use, whether fundamental or technical, because the sentiment is a clear and transparent indicator of success. At the end of the day, sentiment allows a trader to monitor both pure decision-making reasons as well as trading strengths. It also prevents a trader from performing spontaneous trades because it acts as a kind of final checkpoint.
In conclusion, I want to emphasize that there is only one person who can control your trading success or failure – you. A trader’s most common problem is that when everything goes wrong, they usually blame the market, the stock or the entire economy. They rarely blame themselves or attribute it to a lack of discipline and planning. The key to trading success is to understand that sometimes you will lose money and when you do, it can have an extremely negative effect on you and your trades. Understanding this will help to prepare you so that next time you can try to do better by planning your trades, identifying the right stocks, adding the appropriate sentiment and confirming your strategy. In the end, if you’ve done everything correctly, you can open a position and you won’t lose money again.