Backtesting Individual Stock Sentiment with the sentimenTrader Backtesting engine
Published: 2018-06-25 at 10:54:59 CDT
One of the offerings that we have within the sentimenTrader service is the ability to backtest sentiment indicators against indexes and ETF's. This feature has proven to be fairly popular among our users since we implemented it. One of the features requested by users is the ability to backtest individual stocks using the sentimenTrader backtest engine and over the weekend, we rolled this new functionality out to users.
To provide an overview of this new functionality, we've put together a quick video tutorial (you can find it on our YouTube Channel as well as embedded below.
A few key features of this new functionality:
1.) All the functionality of the backtest engine is available although you can currently only test a single stock's Optimism Index (sentiment reading) with that stock. There are plans to expand that to allow users to test single stock sentiment against Indexes, ETF's and other stocks.
2.) When viewing a stock's Optimism Index (Optix), you can select 'Backtest this Indicator' to be taken directly to the backtest engine.
3.) Backtest results are formatted and presented in the same manner as for other backtests. A few samples are provided below.
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Sundial Capital Research is an independent investment research firm dedicated to the application of mass psychology to the financial markets. Sundial publishes the SentimenTrader.com website.
Our focus is not market timing per se, but rather risk management. That may be a distinction without a difference, but it's how we approach the markets. We study signs that suggest it is time to raise or lower market exposure as a function of risk relative to probable reward. It is all about risk-adjusted expectations given existing evidence.