Sentiment on the Market

There are many ways in which we can determine sentiment, but for this moment I will try to explain to you

what the simplest and clearest of them is.

Above you see a sentiment table from myfxbook that shows you the long/short advantage in

percentage(link will be at the end). How do they do it? They have information from various exchanges

about the number of positions and their size, so we can see where the "money" is.
So let's move on to examples.
Let's take a look at the AUD/CAD pair. You can see that there is a great advantage of sell positions
over long positions. And that the average price of a sell position is the level of 0.9078 (It is marked with

a white dotted line). That is, at this moment, people who have takena sell position are on average -246

pips in the loss. Remember that this is only an AVERAGE, which means that some people may have a

much bigger loss and others a smaller one.

In this example it is exactly the same, a huge advantage of short and the price goes up almost

straight. Why? There is a very simple answer to this, where there is a big advantage, there lies the

"money". Remember that these averages are from information from "Retail Traders". So just as

you are looking for "Equal highs,trendlines, etc." to be manipulated, you can add a sentiment

check to make sure your setup goes in the direction of the "money."
 Advantage of buys but the price is going lower

So, does that mean we should always buy when there is a majority of capital in sell positions and

sell when there is a majority of long positions? Absolutely not. Sentiment is tested on a long-term

basis. I think it is important to check it if we play on timeframes like 1H-4H-1D. But even at lower

rtimeframes it can also be helpful.

This tool should only be used to see where most of the retail money is placed!
 Here's a snapshot of the number of lots played in a given position

Please do not use this as an oracle. This tool is only meant to help you and not scare you. "Most

people lose" and you have it very well presented here. But look (red dots), by playing with the crowd

you can make money too. Especially when you play on intervals like 1m-5m.
Let's summarize
1. The sentiment table from myfxbook shows the long/short advantage in
percentage using data from various exchanges about the number of

positions and their size.

2. The table can help identify where the "money" is in the market and assist

in determining market movement.

3. The table should not be used as a sole indicator and should be used in

combination with other analysis methods.

4. The table is tested on a long-term basis and is more useful on

timeframes like 1H-4H-1D but can also be helpful on lower timeframes.

5. The table should not be used to scare you, but to help you make better

decisions.

Watch for extreme sentiment: When a lot of traders have very positive

or negative feelings about a specific currency or the market overall, it

may indicate that the market is overbought or oversold. This can be a

good time to enter or exit a trade in the opposite direction. Also check

the popularity of the pair, the more money and the more popular the

sentiment is stronger
LINK
https://www.myfxbook.com/community/outlook