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Sentiment Contrarian
Sentiment Contrarian analyzes social media sentiment, news sentiment, and market positioning data to identify extreme sentiment levels that often precede reversals. When sentiment reaches extremes, the strategy takes contrarian positions anticipating mean reversion in both sentiment and price.
56%
Win Rate
1.6
Sharpe Ratio
Medium
Risk Level
12-48 hours
Avg Hold
Strategy Overview
Timeframes4h, 1d
Ideal MarketHigh social activity periods
Min Capital$5,000
Avg Hold Time12-48 hours
Strategy Parameters
Data SourcesTwitter, Reddit, News
Monitored platforms and feeds
Sentiment Window24-48 hours
Rolling period for sentiment score
Extreme Threshold>85% or <15%
Bullish/bearish sentiment extremes
Change Velocity>20%/4h
Rapid sentiment shift threshold
Entry Signals
Sentiment reaches extreme bullish/bearish
Rapid sentiment change detected
Influencer activity spike
News event sentiment shift
Advantages
- Alternative data edge
- Early signal before price moves
- Captures narrative-driven moves
- Adapts to market themes
Risks to Consider
- Sentiment can be manipulated
- Lag between sentiment and price
- Noise in social data
- Platform API limitations
Related Strategies
Important Risk Information
Past performance does not guarantee future results. All trading strategies involve risk, and you may lose some or all of your invested capital. The win rates and Sharpe ratios shown are based on backtesting from 2015-2024 and may not reflect future performance. Always use proper position sizing and risk management.