Trading on Expectations: Strategies to Pinpoint Trading Ranges, Trends, and Reversals By Brendan Moynihan

Trading on Expectations examines how market participants’ expectations interact with their actual buying and selling to produce trading ranges, trends, and reversals. Brendan Moynihan brings together economic reasoning, crowd psychology, sentiment analysis, and Market Profile to develop his Sentiment-Activity Model.

The framework combines sentiment readings with evidence of participant activity. Moynihan uses Market Profile to examine individual trading sessions and Long-Term Market Activity charts to track buying and selling across sessions. He pairs these observations with the Daily Sentiment Index and Bullish Consensus to assess whether expectations and transactions reinforce or contradict one another.

Within the model, balanced expectations are associated with trading-range conditions, while aligned sentiment and activity support directional trends. Extreme sentiment becomes a potential reversal warning when buying or selling ceases to support the prevailing expectations. The book explains why contrary opinion requires attention to market activity rather than an automatic trade against the majority.

Application chapters distinguish approaches for scalpers, swing traders, and intermediate-term traders, including entry confirmation, protective stops, and adjustments to contract quantity. Historical examples in Treasury bonds, soybeans, the Deutsche Mark, and crude oil demonstrate the framework. The book positions the model as a decision-making aid that requires judgment, with practical value for traders seeking to interpret market conditions through both expectations and observable participation.

✅ What You’ll Learn

• Explain how expectations influence trading decisions and reactions to economic news.
• Distinguish contrary-opinion analysis from automatically opposing consensus.
• Interpret Market Profile concepts including initial balance, range extension, and participant activity.
• Differentiate responsive and initiating buying and selling.
• Use Long-Term Market Activity charts to monitor participation across trading sessions.
• Combine sentiment readings with activity evidence to assess ranges, trends, and potential reversals.
• Recognize when extreme sentiment remains consistent with an ongoing trend.
• Adapt the Sentiment-Activity Model to scalping, swing, and intermediate-term perspectives.
• Relate protective-stop distance to contract quantity and planned dollar exposure.
• Examine historical applications across interest-rate, agricultural, currency, and energy futures.

💡 Key Benefits

• Provides an integrated framework for interpreting what participants expect and how they act.
• Adds market context to sentiment extremes, improving the basis for evaluating contrarian opportunities.
• Connects intraday auction observations with developments across longer time horizons.
• Helps explain why similar news can produce different price responses under different expectations.
• Links market analysis with practical decisions about confirmation, exits, and exposure.

👤 Who This Book Is For

• Intermediate to advanced futures traders seeking a structured approach to market conditions.
• Market Profile traders interested in incorporating sentiment into auction analysis.
• Day and swing traders studying range extension, reversal confirmation, and trade management.
• Discretionary position traders and analysts examining crowd expectations alongside buying and selling activity.

📚 Table of Contents

• Economics
• Psychology
• Expectations
• Sentiment
• Markets
• Market Activity
• Long-Term Market Activity
• The Coherent Market Theory and the Sentiment-Activity Model
• Application of the Sentiment-Activity Model
• Treasury Bonds
• Soybeans
• Deutsche Mark
• Crude Oil

Trading on Expectations: Strategies to Pinpoint Trading Ranges, Trends, and Reversals By Brendan Moynihan