Sentiment Cycle Indicator PerformanceTake a look at the performance of the Sentiment Cycle Indicator (PAID) on the Bank Nifty 15-minute chart—it beautifully captures the sideways movement. In sideways areas, where there’s no red or green background, the indicator identifies “no sentiment.” As per the indicator, this means there’s neither bearish sentiment (red background) nor bullish sentiment (green background). Instead, the chart simply displays its default background color, which in my case is white.
This unique feature of the indicator, which I’ve emphasized from the beginning, is its ability to not only provide buy/sell signals but also highlight no sentiment zones, which can be treated as no-trading zones. This helps traders avoid overtrading, a common pitfall in sideways markets.
Recently, the market has moved out of the sentiment zone, and the indicator accurately captured the transition. Booking profits is entirely up to the trader’s discretion. Additionally, on shorter timeframes like 5 minutes, the indicator can capture more points with multiple entry opportunities. This is especially useful for Bank Nifty, where premium decay (theta decay) can make holding trades over a long period risky. Therefore, timeframes like 1 minute, 3 minutes, 5 minutes, or even 15 minutes work well.
Take a look at the highlighted area within the black line box. In this zone, Bank Nifty was gradually moving down, but the volume was decreasing, and other elements failed to detect any sentiment. This is where the Sentiment Cycle Indicator proves its value. It identifies the lack of clear sentiment, helping you avoid false signals. When the sentiment is eventually detected, it provides a sure-shot signal, offering clarity and precision in your trading decisions.
Currently, the market appears largely sideways, and wherever the indicator generates a buy or sell signal, it effectively identifies trapping zones. This highlights the true power of the Sentiment Cycle Indicator in helping traders navigate various market conditions with precision.
