Fear Greed in Trading Index
Greetings to everyone in the Project Hope community and Steemit in General, I hope you are having a very pleasant few days, each in their own way, according to their culture, but the important thing is that have a good time.
Today I would like to share some impressions that I have had regarding the strategies that I have been studying from some very profitable traders, and that even though I do not believe that I apply what they do to the letter, I usually read, watch some videos in which they explain what they do, and there is something particular that I recently saw, and I would like to share it and comment what I think about it with all of you.
As you know, I like trading, I consider it something quite risky, I never lose sight of it, but with good strategy and having good risk control you can do interesting things.
There is something that in general I think we all can and should know, especially if we are somehow immersed in the markets, and this is the Fear and Greed Index, which is a way to see how the market behaves and in a way, how it could react based on the state of the moment in relation to those two aspects, fear or greed. This is one of the tools used by a trader I was analyzing recently, which basically operates using fundamental news, but of course, also uses technical aspects.
He, unlike others I have seen, and I found it interesting and useful, talks about how to use this index, in this case using the Fear & Greed Index that the people at CNN Busisness have as a public tool.
This trader says that when the index is more inclined to fear, it is because many could be selling, and it is time to buy, because the same fear makes people want to support their holdings in something more stable and "safe", and many even sell at a loss. Which indicates that in this case, buying cheap, when the price rises, the index generally leans towards the side of greed, and that is when many are willing to buy, even when the price is very high or overvalued.
The reality is that you cannot just operate using this index, without seeing the market, previous prices, etc., but it particularly seemed to me that it could be a good complement to any strategy, and I am particularly analyzing, doing backtesting, to see how In reality, this tool can serve as a complement to what I do.
I would like to know what you think about it, have you read or heard of this index, have you ever used it?
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The Fear & Greed Index should be a powerful trading tool because the market is moved by the fear of getting your assets liquidated(selling pressure) and the Greed of getting rich(buying pressure). This index can really help traders determine when to sell and when to buy.
Superb content, thanks for sharing it with us @josevas217
I knew it, but had not used it to determine buy or sell. I think I'll be using it a bit more.
Hi @josevas217, yes I had heard about this indicator, but as mentioned it is an indicator of something that is possibly happening in the market, if we accompany it with some technical details it could become useful.
So long, have a great week.
I think that nothing should be used only in the market, much less considering that there are so many factors that affect it. Thanks for comment.
hi dear friend @josevas217
It is logical that the indicator shows fear, the market is very bad, everyone is selling and I think that it is time to buy.
god bless you
You have to know how to read this indicator, especially know how to combine it with other parameters to have a better chance of hitting the price direction.
Thank you @naka05 for the support.
Fear and greed index is easy to understand I use this tool many time. This is most accurate technology to know when exactly you have to sell and when you have to buy. Also We can add technical analysis and fundamental analysis so your signal will be more poweful and accurate.