Trader’s Sentiment Checklist

Using COT, ATR, RSI, and Bollinger Bands together

So, You are hoping to trade today. Firstly work your way through this checklist and make notes in your journal. The results will tell you whether you’ll be good today or would it better to go back to bed due to lack interest and try again tomorrow.

1. Market Positioning — COT Report

• ☐ Check the latest Commitments of Traders (COT) data.
• ☐ Identify whether large speculators are net long or net short.
• ☐ Compare this week’s positioning to the previous 4–6 weeks.
• ☐ Note any extreme readings — they often precede reversals.
• ☐ Record your interpretation in your journal: “Smart money is accumulating / distributing.”

2. Volatility Awareness — ATR

• ☐ Observe the Average True Range (ATR) on your chosen timeframe.
• ☐ Is volatility rising or falling?
• ☐ Adjust your stop loss and position size accordingly.
• ☐ High ATR → expect wider swings, trade smaller.
• ☐ Low ATR → expect calm ranges, trade tighter.

3. Momentum and Conviction — RSI

• ☐ Check the Relative Strength Index (RSI) for emotional temperature.
• ☐ Above 70 → overbought (greed zone).
• ☐ Below 30 → oversold (fear zone).
• ☐ Between 45–55 → balanced sentiment.
• ☐ Note whether RSI confirms or contradicts price direction.
• ☐ Journal the emotional tone: “Market showing conviction / hesitation.”

4. Volatility Breathing — Bollinger Bands

• ☐ Observe whether bands are tightening or widening.
• ☐ Tight bands → calm before movement (watch for breakout).
• ☐ Wide bands → high volatility (watch for exhaustion).
• ☐ Check if price touches or breaks the outer band — often signals emotional extremes.
• ☐ Combine with RSI for confirmation of momentum strength.

5. Sentiment Context — Fear & Greed Index

• ☐ Record the current Fear & Greed score (0–100).
• ☐ Identify the market’s emotional climate: fear, neutral, or greed.
• ☐ Ask: “Am I trading with or against the crowd’s emotion?”
• ☐ Use extremes (below 25 or above 75) as context, not prediction.

6. Integration — Emotional + Technical Alignment

• ☐ Do technical signals align with sentiment?
• ☐ If both show greed → tighten risk, prepare for correction.
• ☐ If both show fear → look for stabilisation or accumulation.
• ☐ If mixed → stay neutral, wait for clarity.
• ☐ Write a short reflection: “Today’s market mood feels ___, so I’ll trade ___.”

7. Weekly Reflection

• ☐ Review how sentiment influenced your trades.
• ☐ Did you follow your plan or react emotionally?
• ☐ Note patterns: do you perform better in fear or greed phases?
• ☐ Adjust your strategy for next week’s emotional climate.

My real goal is to help people to develop an income from investing that will make their employment optional. I have developed a library of books on Personal Finance that are largely jargon free and help establish a foundation of how money really works. No matter how constrained your income is you can make decisions that result in growing your wealth over time.

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