Sentiment

A stock’s sentiment is the collective sentiment of the traders and investors who have positions or are considering entering positions in the stock. But sentiment is not simply the current mood of traders and investors. Sentiment is the prevailing expectations of the market for the future prospects of the stock. In other words, sentiment represents bullish or bearish feelings for the future prospects of a stock. This means the current movements of a stock’s price are dictated by what the market expects will happen in the future, not what has already taken place! Any news is old news, any reported earnings data is old information. I’m sure you’ve heard the expression, “the market is always looking forward.” This is not just a saying. It’s a rule to trade by and it must be applied to be successful in the markets.