I just noticed that many people still don't truly understand the concept of market sentiment, even though it is a key factor in making money from stocks and all other assets.

Market sentiment is simply the feeling of traders towards the market. When investors are fearful, money flows out of stocks into safer assets like gold. Conversely, when the market is confident, everyone rushes to buy stocks. This is the bullish and bearish market condition caused more by investor psychology than fundamental factors.

The best way to analyze sentiment is by using appropriate tools. The first one to know is VIX or the fear index. If VIX rises, it indicates the market is nervous. This often presents a good buying opportunity. If VIX falls, it shows investors are fully confident, which can sometimes be a warning sign that the market is about to decline.

Another tool is the High-Low Index, which indicates how many stocks are hitting their 52-week highs. When this value drops below 30, it shows the market is weak. But when it exceeds 70, the market is in a strong bullish phase.

The Bullish Percent Index (BPI) is another indicator that shows the proportion of stocks in an uptrend. If the BPI exceeds 80 percent, it indicates excessive market confidence. If it drops below 20 percent, fear is dominating the market.

Besides these indicators, following news is equally important. For example, in 2021, cryptocurrencies gained a lot of attention, creating a rapid FOMO trend, and prices surged based on herd psychology. But when negative news came out, confidence disappeared, and prices fell.

What you need to understand is that stock sentiment or market feeling is not the only indicator used for decision-making. It should be combined with technical analysis. When we know the market is fearful and technicals confirm that prices will recover, that’s a good opportunity to buy.

The key lesson is that sentiment is market psychology. Once you understand it, you can read the market’s mind—whether it’s forex, Thai stocks, foreign stocks, or cryptocurrencies—all based on the same principles. Successful traders are those who know how to leverage this sentiment as a tool to generate profits.