ActiveTrader 2013-01 Google Trends [Rev.B] by Eugene

Google Trends: Composite Sentiment Index system (Revised)

Note (2017): Google Trends has been restored, losing Weekly scale to Google's protection against automated downloaders. Now that the data is Monthly, old rules no longer apply and have been adjusted.

Note (2013): after the magazine publication, Google has considerably changed the way Google Trends are calculated. Consequently, old rules no longer apply. We had to adjust the strategy to the new calculation.

This system uses Google Trends for buy/sell signals. For background and theory, see original magazine article: Google Trend Sentiment Systems.

Uses Weekly scale


Google Trend filter composition rules

This equal-weighted index is built of four “bearish” search keywords: “Roubini”, “stock market crash”, “recession” and “unemployment”.

  • Index is bullish: by default i.e. no unusual interest to the bearish keywords. The stock market is considered intrinsically bullish.

  • Index is bearish: composite Google Trend rank value has been up on at least 2 times in the last 3 months, indicating increasing interest to the bearish keywords.

System rules

  1. Buy at market next bar if the Google Trends filter is bearish.

  2. Sell at market next bar if the Google Trends filter is bullish.

Author: Eugene
Category: Fundamentals
Creation Date: 9/1/2017
Licence: Freeware
Availability: Globally
Instructions for Script Download
  1. In Wealth-Lab client software, open the Strategy Explorer (Ctrl+O)
  2. Click the "Download..." button
  3. Click "Begin Download"