Trading on Sentiment: The Power of Minds Over Markets (Wiley Finance)

In his debut book on trading psychology, Inside the Investors Brain, Richard Peterson demonstrated how managing emotions helps top investors outperform. Now, in Trading on Sentiment, he takes you inside the science of crowd psychology and demonstrates that not only do price patterns exist, but the most predictable ones are rooted in our shared human nature.Petersons team developed text analysis engines to mine data topics, beliefs, and emotions from social media. Based on that data, they put together a marketneutral social mediabased hedge fund that beat the S&P 500 by more than twentyfour percentthrough the 2008 financial crisis. In this groundbreaking guide, he shows you how they did it and why it worked. Applying algorithms to social media data opened up an unprecedented world of insight into the elusive patterns of investor sentiment driving repeating market moves. Inside, you gain a privileged look at the media content that moves investors, along with timetested techniques to make the smart moveseven when it doesnt feel right. This book digs underneath technicals and fundamentals to explain the primary mover of market prices the global information flow and how investors react to it. It provides the expert guidance you need to develop a competitive edge, manage risk, and overcome our sometimesflawed human nature. Learn how traders are using sentiment analysis and statistical tools to extract value from media data in order to: Foresee important price moves using an understanding of how investors process news. Make more profitable investment decisions by identifying when prices are trending, when trends are turning, and when sharp market moves are likely to reverse. Use media sentiment to improve value and momentum investing returns. Avoid the pitfalls of unique price patterns found in commodities, currencies, and during speculative bubblesTrading on Sentiment deepens your understanding of markets and supplies you with the tools and techniques to beat global markets whether theyre going up, down, or sideways.