Fear and Greed Index - Crypto Academy / S4W5 - Homework Post for @wahyunahrul

Ques 1 - Explain why emotional states can affect cryptocurrency price movements?

Ans = 1 Emotional states can affect cryptocurrencies prices movement in many ways like fear and greed way .

In this both emotion are shown in fear and greed b. When most people are afraid that cryptocurrencies will decline and also they are afraid that they will experience a loss then people will start to decide to sell their cryptocurrencies to avoid these losses .

Because the impact of the sales made by the people is value of the cryptocurrencies market is large many people want to buy or even large amount of the profit then value of cryptocurrencies will increase .

When the lower number indicate the emotion in market getting close to fear or losing the market so their value become decrease . In this way cryptocurrencies effect the emotion.

Ques 2- In your personal opinion, is the Fear and Greed Index a good indicator of the market's emotional state? if not, try to give reasons and examples of other similar indicators for comparison.

Ans=2 Yes , ofcourse fear and greed index a good indicators of the market emotional state because it is a risk of the market because quantify the market .

It is based on premise that excessive fear can result in stocks trading and below there intrinsic value while at other hand in stocks are being bid up for above what they should be worth .

When market is bullish people can experience fear . greed can also affect our brain in other way to coerce to set common sense and self control and provoke change .

There is no generally accepted research on the greed . When it is come to person and their money fear and greed are very powerful emotion or motivator.

Ques 3- Give your personal opinion on what data should be added to the Fear and Greed Indicator.

Ans=3 investor in low quality are their bond are accepting 1.90% point in their additional yield over the investment grade corporate bond.

This is highly spread and also shaply lower than their recent prices and also suggest they investor are pursuing high risk strategics .

This is the greed rating . The CBOE volatility index is neutral reading is their market risk that appear low on the fear rating .

These are both fear and greed create over reaction which means tader can buy oversold assets and sell over the bought onesy

Ques 4- Do a technical analysis for 2 to 3 days (maybe more) using the Feer and Greed Index and the help of other indicators. Show how you made the decision to enter the cryptocurrency market and explain the results of your trade (Screenshot Required).

Well, I have first take out the Fear and Greed Index Chart over time of days. And now, I am going to figure out but signal and sell signal through this.

Buy Signal

I am going to use William % R Indicator with this Fear and Greed Index and William% R Indicator helps us to identify the strength of the trend and upcoming trend.

Sell Signal

From above image, You can see that there is extreme greed condition and from there, I checked the BTC chart and also look at the % R Indicator and then get the sell signal.

Through above image, I have started short btc on Future trade and then, I earned Profit.

Conclusion

Fear and Greed Index is very major index in crypto world. Most of us are not fully aware of this index. Thanks Professor @wahyunahrul for this very informative lecture. I have learned properly about Fear and Greed Index through your lecture.