Sentiment Analysis (opinion mining) is integrated into WolfBot. It’s automatically applied to all text data coming from plugins. This means WolfBot does natural language processing to determine the attitude/sentiment of the author – meaning to see if he is talking positively or negatively. In market terms this translate to “bullish” resp. “bearish”.
To protect our traders from biased authors, FUD, fake news, etc… this information is aggregated in our database and cross-referenced against multiple sources. Eventually it is always the trade strategy making the decision, so it is common to wait for the market to actually move in the direction of the news (or the selloff to end) before opening a new trade position.
A recent research study from Warwick Business School concluded that crypto currency prices are not driven by any economic factors. Instead their prices are only driven by the mood swings of investors according to their findings. This makes sentiment analysis the most important tool for trading.