Quote from nazzdack:
It can "work" as long as you can identify a "data sample" of people in the market who tend to be consistently right or wrong and you get the info soon enough to act on it. 
I agree with nazzdack.
In terms of trading experience, it did not come on the horizon for me for most of my trading expereince.
Once sentiment comes into view, it is very worth examining and "mining".
The only group, I believe, that is worth tracking is "smart Money".
As traderzones says, he deals relative to noise. Noise is not part of the market for people who have drilled down into the operation of the market and especially those who know what they are doing. It is almost a priori when thought through.
Sentiment is most discernable with "smart money" and especially when it counts.
Garcia sees the rare "knockout" punches he mentions at the end of profit cycles based on sentiment. Too bad, because the price action is over by then.
Sentiment defines the dominance of trending and as may be seen there are non dominant interludes within trends. By wiring into those who are very perceptive, you get the clear advantage of being parasitic to their efforts and can take the ride.
There are many formal measures of sentiment and they do fit in to various categories of sensitivty. The three that are most convenient to track are the coarse in overbought or sold (leading aspects of indicators (absolute or oscillator in nature)); medium in sensitivty such as the Accumulation/Distribution scalor measured from +5 to -5; and the finest leading sentiment of the "smart money" that is meaured on a tick level by looking at the ranging from and towards premium (this is NOT an inefficiency or anomally)
Using sentiment as well as can be done comes in two flavors: making money and optimizing positioning during change.
The most important is the holding through full profit segments. Since sentimnt waxes and wanes, it is important to have an intensity measure. You know you have it down when you can use the detector to see the transient in sentiment. The best trial approach on this is to be able to detect the non dominant move within trends as "seeing" the waning then the waxing going into the "end" of a trend.
Another very convenient aspect of measuring sentiment is the period during overlap of trends. Call this the period from the first opportunity to take a segment profit until the last opportunity (See SKO's first and last chance queries and observations).
On the DOM many games are played. Often price turns are depicted by Walls that are insurmountable (when there is an ordinary change in dominance). One time in the DOM, and it is a thing that if a person knows the difference between a retrace and a reversal (at their initial commnecement) where sentiment plays a key role, is where the overlap of trends ends. This is the only time a significant wall collapses as a consequence of sentiment change.
Superficial traders who practice entering on the end of retraces get their balls cut off and go upsidedown immediately at this time. first they confused a retrace with a real reversal and they entered believing sentiment had NOT changed since they cannot observe sentiment. By knowing how to observe sentiment all this ballcutting is eliminated.
Sentiment changes at the end of trend ovelap. A trader either measures sentiment or he gets TOLD sentiment. Those who get told are like a trader who is the OP of a forum on trading signals involving ATR as related to signal generation. Or as in another thread on using percentiles related to volatility. Underlying most meaures of the market or as signal generator approaches, is sentiment.
sentiment appears in the picture as various times for various scenes. I feel using it's first derivative relative to expertise, is one of the best "anticipatory" indicators available. It certainly avoids operating inductively as well.
It you cannot follow what I am saying do not worry about it. On the other hand trading parasitically off smart money is recognized by most experts as a good and convenient modus. Nazzdack is right on the mark!!!.
