Sentiment Leads Price
Price action lags sentiment by hours or days. When millions of traders turn bullish on Reddit and Twitter, institutional money notices and buys. Smart traders who catch sentiment shifts early profit before price catches up.
Measuring Sentiment Accurately
Basic sentiment scores say bullish/bearish. Advanced systems measure:
- Sentiment acceleration: Is bullish sentiment increasing or decreasing?
- Weighted sentiment: Adjust by account age and verification status
- Sentiment divergence: Do social and news sentiment disagree?
- Sentiment extremes: Is this euphoria or panic?
Combining Sentiment With Technicals
Sentiment + technicals beats either alone:
- Bullish sentiment + RSI oversold: Strong reversal setup
- Bearish sentiment + RSI overbought: Likely pullback
- Sentiment extreme + trend reversal: High probability trade
View AI sentiment scores for all holdings in TradePilot.
Real-World Example
A stock drops 5% on moderate news. Basic traders panic and sell. Sentiment analysis shows retail is bearish but institutional buys the dip. Price bounces 10% in two days. Timing comes from sentiment understanding.