Trading on Sentiment: The Power of Minds Over Markets Hardcover - 2016

From the jacket flap

In his debut book on trading psychology, Inside the Investor's 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.

Peterson's team developed text analysis engines to mine data - topics, beliefs, and emotions- from social media. Based on that data, they put together a market-neutral social media-based hedge fund that beat the S&P 500 by more than twenty-four percent--through the 2008 financial crisis. In this groundbreaking guide, he shows you how they did it and why it works. Applying algorithms to social media data opens 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 news and social media themes that move investors, along with time-tested techniques to make the smart moves--even when it doesn't 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 sometimes-flawed human nature. Learn how traders are using sentiment analysis and statistical tools in order to:

• Foresee how market prices will be influenced by news, rumor, and social media
• Identify when prices are trending, when trends are turning, and when sharp market moves are likely to reverse
• Improve value and momentum-based investment returns
• Take advantage of unique price patterns found in commodities, currencies, and during speculative bubbles
• Forecast changes in global economic activity
• Overcome the most common mistakes of the investing herd

Trading on Sentiment deepens your understanding of markets and supplies you with the tools and techniques to profit--whether prices are moving up, down, or sideways.