Sentiment analysis
Using software to judge whether a piece of text sounds positive or negative.
In plain English
Sentiment tools read news, posts or reports and give each one a score, from very negative to very positive. Traders hope that good-sounding news means rising prices.
Uncle Gary explains
Aunt Linda texts the family group: 'Fine.' A sentiment model reads it as neutral. Everyone in the family knows it means war.
Why it matters for your money
Text that sounds positive and prices that go up are two different things. In our test, how positive the news sounded had no link with what the stock did next.
Where we tested it
Related terms
All glossary terms. Educational content, not financial advice.