Trading Sentiment Analysis

Trading Sentimental Analysis
37th ATMA Bangalore Educational Meeting
© Copyright 2015 Marketcalls Financial Services Pvt Ltd · All Rights Reserved www.marketcalls.in

Agenda
 Why Sentimental Analysis in Trading.
 Gathering and Evaluating the Crowd Sentiment.
 News and Sentimental Factors.
 Understand the Retail Traders Attitude.
 How and When to Trade Against Retail Traders Sentiment.

What I do?
 Financial Blogger and Author of Marketcalls
 Full Time Trader
 Passionate about trading analysis and systems
 System Trader
 www.marketcalls.in/about

Buy Price
Stop Loss
Target
My Expectation

Buy Price
Stop Loss
Target
What the Market Does?

Buy Price
Target
So I removed Stop Loss

Buy Price
Target
And then Market Did this
My Tolerance
Level

Market Doesn’t know where your stop is. It
knows where everyone's stop is. You just
put it in the same place.
- Tom Dante

A strategy that attempts to force some market
participants out of their positions by driving the
price of an asset to a level where many individuals
have chosen to set their stop-loss orders.
- investopedia
Beware of Stop Hunting

Why Stop Hunting Happens?
 Retail Traders are Highly Leveraged 10:1 or 20:1 times
 Stop loss are critical for them to protect them from unlimited losses
 They are Speculators most of the time
 Speculators Bet when Market Reaches Round Figure (e.g Nifty at 8000)
 They are Emotional Traders. They are the one who create gaps most of the time.
 They bet when there is a Economic Event/ Earning Result/ Political Event..etc
 They are the weaker hands who hold weak longs/weak shorts
 Large Institutional speculative players love to trigger stops to generate directional momentum in
stock/index or to benefit from the volatility.

Mid-Day Stop Hunting
 Most of the Days 50% of Volume Happens in first or last 1 hour
 Liquidity Dry Up during mid of the day
 Very less volume is required to move the stock during mid-day
 Weak Longs/Short Removed from the Market

What is Sentimental Analysis?

Sentimental Analysis
 Public/Expert Opinion about a stock/index
 Global Market Sentiment
 Crowd Opinion during a Major Economic/Political event.
 Retail Traders Sentiment
 What people believe in when there is a huge volatility in the market.

Bihar Election Results
BJP Looses
Markets Go
Up
BJP Wins
Markets go
UP
BJP Losses
Markets Go
Down
BJP Wins
Markets Go
Down

Post Bihar Election Results
BJP Looses
Markets Go
Up

Post Bihar Election Results

Paris Terror Attack

After Paris Terror Attack

Where to Collect the Sentimental Data
 TV Channels, Magazines, Newspapers
 Social Media (FB groups/Twitter/Whatsapp Group/MMB Dashboard)
 Broker Research Reports
 News Sentiment Analysis Portals ( e.g Sentifi/Google Trends )
 Analysis that went viral in the Internet
 Sentimental Indicators (Volume, OI Data, Gap Analysis, Responsive Smooth Filters, Market Profile)

Stock Market Crash – Google Trends

Divergence 2016
Traders Web Conference
Jan 2nd – Jan 30th 2016
www.marketcalls.in/div2016

Magazine Cover Indicator

Vomiting Camel Pattern

Post Camel Vomiting Pattern

IIP Data Vs Sensex

Interest Rate Vs Sensex

Trade Deficit

Dooms Day Predictions

Open Interest Data

Nifty Options Open Interest

Participants OI data

Nifty Vs Client OI (Index Long/Short)

Nifty Vs FII OI (Index Long/Short)

Nifty Vs FII OI (Index Options)

Nifty Vs Client OI (Index Options)

RBI Rate Cut and Scene of Crime

DR Reddy and Scene of Crime

Understanding Gaps

Gaps & Nifty Future

MARUTI Daily Future Charts

GAIL Daily Future Charts

Sentimental Gaps & Nifty Future

Sentimental Indicators

Nifty Weekly Sentiment

CNX Energy Weekly Sentiment

Extreme Sentiment

Crude Weekly Sentiment

Gold Weekly Sentiment

Gold Sentiment Index

Why Newbie Traders are so Confident

Trading System Adoption

Questions?

Thank You

Trading Sentiment Analysis

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