Sentiment Trading

Sentiment trading is an investment strategy that relies on analyzing the overall mood or attitude of investors toward a particular asset or market. Instead of only evaluating financial data, traders assess whether investors are feeling optimistic (bullish) or pessimistic (bearish), often through tools like news, social media, or market surveys. The idea is to identify when market sentiment signals a potential turning point—such as when overly pessimistic traders might signal a buying opportunity or overly optimistic traders might indicate a sell. This approach aims to capitalize on herd behavior and market psychology to make more informed trading decisions.