Fear and greed index: Easy explanation

In this video, you will learn about the fear and greed index and how it works.

#fearandgreedindex #marketindex #wallstreetmojo #financialmarket #marketsentiment

Chapters:
00:00 – Introduction
00:45 – What is the fear and greed index?
01:34 – How does the fear and greed index work?
02:42 – Calculation of the fear and greed index
04:49 – Conclusion

What is the fear and greed index?
The fear and greed index was introduced by CNNMoney, which basically gauges the sentiment of the market participants.

The index calculates the sentiment of the market participants on a scale of 0 to 100 by tracking prices on a daily, weekly, monthly, and yearly timeframe.


One can use it to trade any market, be it stocks or even crypto, and it will help you make calculated decisions.

How does the fear and greed index work?
The index gauges these emotions and allows speculators to understand how it would affect the prices and can be used to time the markets to some extent.


If the index is heavily leaning towards the fear side, we can expect the prices to fall. If it is leaning towards the greed side, the prices to increase. Finally, the market participants still haven’t decided if it hovers around the middle.

The fear and greed index is often seen as an overall market index, and people use it to identify whether it is overbought or oversold.

(Explained in detail in the video)

Calculation of the fear and greed index
Stock price momentum
Stock price strength
Stock price breadth
Put and call options
Junk bond demand
Market volatility
Safe haven demand

(Explained in detail in the video)

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