The disposition of investors and traders towards the market.
Sentiment, also known as market sentiment, is the disposition that investors and traders have toward the market. It serves as a great tool for the average trader since it helps them know the existing stand of the market and relate to it. Moreover, this disposition also helps them interface with different market conditions in the long run.
The analysis of this disposition of traders and investments is known as sentiment analysis. This analysis gathers information about market opinion from industry news and social media, and often influences trading decisions. When the overriding market sentiment is positive, the average trader is more likely to buy or keep their existing portfolio in hopes of more profits in the future.