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Can anyone please explain to me how sentiment analysis can work as a strategy in finance?

5 Answers

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It works, but I think it works better with the technical analysis side as well. It is good to choose a market that goes with our values, but is more important to be aware of the tendancies of that market and what can influence that market. So, do your research the best you can and study the market you are interested in as well. That way, your sentimental analysis could profit you. :)  
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There is an association between investors sentiment and the market price in a way that when this option involved in positive sentiments stock price in the market tend to rise, so examaning investors opinions through sentiment analysis method can provide valuable insight Into the stock market future
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Sentiment analysis is a type of analysis that uses natural language processing to assess the sentiment of market participants. It can be used as a trading strategy by analyzing the sentiment of market participants to determine the direction of the market. This can be done by monitoring news sources, social media posts, and other sources of market sentiment. Additionally, sentiment analysis can be used to identify potential trading opportunities and make more informed trading decisions.
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Sentiment analysis can be used as a tool to supplement trading strategies, but it should not be the sole basis for financial decisions.
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Yes, it can be used as a contrarian indicator across financial markets. Trading with sentiment may also assist investors in determining directional biases and possibly even finding potential trends in markets
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