Sentiment Analysis in Trading

Markets are driven by fear and greed as much as fundamentals. AI sentiment models quantify crowd psychology and find contrarian edges.

Key sentiment signals

• Funding rates (crypto) — persistent positive = overleveraged longs, often precedes correction
• Put/call ratio (equities) — extreme put buying = capitulation; contrarian bullish
• Social sentiment — Twitter/Reddit volume spikes often precede reversals (too many bulls = top)
• Long/short ratio — retail lopsidedness on exchanges signals impending squeeze
• CNN Fear & Greed Index — extreme fear has historically been a buy signal for patient traders

How Tidava uses sentiment

Sentiment is one of 6 engine families in Tidava. It gets more weight when technical signals are conflicting and less weight in macro-driven moves. When sentiment is extreme AND technicals confirm, the verdict confidence rises significantly.