Stock Market Sentiment Analysis - How It Works

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SwaggyStocks Stock Market Sentiment Analysis - How It Works

Trading on social sentiment is a volatile, dangerous, and thrilling experience. Using stock market sentiment analysis you can give yourself a chance to predict the next meme stock run or short-squeeze, but it takes a lot of waiting, patience, and a high tolerance for risk. This is not financial advice and I do not recommend anyone trades using social sentiment, but if you want to learn a little about how it all works then continue reading. What SwaggyStocks has done with stock market sentiment analysis has taken sentiment trading to the next level. Many other sentiment providers use "bag of words" sentiment meaning they analyze each sentence and paragraph word by word without any structure or meaning. With the bag of words method almost all context is lost and the sentiment analysis is nearly useless (trust us, we used bag of words analysis in the past). In comes neural networks, natural language processing, and machine learning, the SwaggyStocks way. We can't completely give out the secret sauce to our stock market sentiment analysis process, but what SwaggyStocks has done is combined all of the above into a cheeky algorithm that is able to process social comments and ticker mentions in realtime. We scan the public internet by means of stock market forums and look for ticker mentions, then we gauge the sentiment behind it. Is the original poster (OP) bullish or bearish? Do they want the stock to go up or down? Over 150,000 comments are processed each day across all categories and we continue to add new sources.

What is classified as bullish, bearish, or neutral?

Bullish = Participants want the stock to go up and includes directional betting to the upside.

Bearish = Participants want the stock to go down and usually believe the stock is either overpriced or they simply do not like the company.

Neutral = You'll see there are times when neutral comments are exponentially higher than both bullish or bearish sentiment. That's because not every comment is classified as bullish or bearish and many participants could be talking about market events that revolve around a company. For example, is Elon tweeting something random again? Is an Apple iPhone release event occurring? These types of market-related events usually end up adding to the net-neutral side of sentiment.

On the other hand, short-reports, fraudulent company claims, and earnings reports are generally one-sided when it comes to sentiment. You'll see directional betting and bullish or bearish sentiment build up with these types of events. SwaggyStocks is a leader in social sentiment, be sure to check out our , and .