The Fear and Greed Index measures market emotion from 0 (Extreme Fear) to 100 (Extreme Greed) and plays a key role in Legion Bot decisions.
What It Measures
Volatility (25%), market momentum/volume (25%), social media (15%), surveys (15%), Bitcoin dominance (10%), and Google Trends (10%).
Contrarian AI Trading
When the index drops below 20 (Extreme Fear), our bot boosts long signal confidence since extreme fear often coincides with bottoms. Above 80 (Extreme Greed), the bot becomes cautious with longs and looks for shorts.
Sentiment as Filter, Not Signal
Sentiment alone does not trigger trades. It modifies confidence levels of technical signals. A bullish signal during Extreme Fear gets boosted, while the same signal during Extreme Greed gets downgraded. This avoids being too early, since markets can stay irrational longer than you can stay solvent.