The Bullish, Bearish and Plain Confused

There are three main types of sentiment when it comes to forming opinions in the forex market:

1. Bullish
2. Bearish
3. just plain confused

If the majority of the market wants to sell that currency, the market sentiment is deemed to be bearish; if marjority wants to buy that currency, the market sentiment is bullish; and when most market participants are unsure of what to do at the moment, the sentiment ends up being missed. Since the US dollar is the currency on the opposite side of 80% of all foreign exchange transactions, most traders will be concerned with what the market thinks about the US dollar. Currency prices simply embody the market’s perceptions of reality and the sum total of traders’ emotions.

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