Investing tool: interesting sentiment indicator for overbought/oversold

Check out what Dr. Richard Peterson is doing at MarketPsych.

He’s done perhaps the deepest research into different sentiment indicators in the stock market. He’s got so many emotions to describe the activity in social media that it sounds almost like he’s anthropomorphized the markets and market chatter.

Continue reading “Investing tool: interesting sentiment indicator for overbought/oversold”

MarketPsych: Profiting from investor pychology — with Dr. Richard Peterson (transcript)

This is a transcript of our interview with Dr. Richard Peterson, author of MarketPsych: How to Manage Fear and Build Your Investor Identity, which came out this year. Check out the archives of our show. Subscribe on iTunes.

Peterson:   There’s a lot of literature in behavioral economies and behavioral finance about the mistakes that people make, like holding their losers too long, or impulsively chasing after stocks. But there isn’t much work about how do you help people to not make those mistakes. So, we’ve really got interested in how do we change people’s decision-making for the better. Continue reading “MarketPsych: Profiting from investor pychology — with Dr. Richard Peterson (transcript)”

MarketPysch: Profiting from investor psychology and the Internet (podcast)

On Tradestreaming Radio, we’re interviewing lots of innovative entrepreneurs, investors, and researchers all trying to make investors better at what they do.  Check out our archives.  Subscribe on iTunes.

From this perch, it seems like investors are witnessing a Renaissance of tools, data, and research that overlays investor psychology on 24/7 streaming content of the Internet.

The magic bullet for individual investors and hedge funds alike is to use this data to create profitable trading strategies.  Previous podcasts have looked at using Google search data to find rising stocks.  Other tradestreaming techniques have centered around creating forecasts of future events using online media.

This week’s guest on Tradestreaming Radio is Richard Peterson, MD (yes, that kind of doctor).  He’s also an RIA and his firm, MarketPsych LLC helps to coach investors and their advisors into making better investment decisions.  More interesting, the firm has developed a sentiment analysis engine from its own experience trading quantitative strategies in an in-house hedge fund.

Dr. Peterson’s new book, MarketPsych: How to Manage Fear and Build Your Investor Identity (Amazon link) is an amazingly refreshing read.  All investors struggle with assessing their risk tolerance, performance and decision making.  While behavioral economics/finance has helped us understand what problems we face, it hasn’t helped a whole lot in truly helping us change our investing behavior. MarketPsych provides a clear overview of the problems and gets its hands dirty helping us investors help ourselves.

In the podcast, we talk about:

  • how investors make decisions
  • how investors can use changes in sentiment to forecast stock price movements
  • how hedge funds use investor psychology and Internet content/social media to profit
  • how technology innovation leads to higher stock prices.

Listen to the whole program

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