Sentiment Trading – Quantitative Proof – Part 1

Does Retail Sentiment Data have any predictive power for future price movements? If so, what does it help you predict? Is Sentiment a contrarian indicator or does price more often follow the direction that retail predicted? How reliable are those predictions? Most important of all, is there any money to be made from using Retail Sentiment to influence your trading decisions? These are the questions to which I want to find answers in this series of blog posts. I am going to put them under the microscope, in a purely data-driven way, and see whether the hypotheses can be confirmed or [...]