Cognitive Biases and Emotion States Influence Decision-Making in the Stock Market

This research paper is aimed at understanding the role of Cognitive Biases and Emotion states indecision-making in the stock market. This paper uses sentiment analysis and deep learning models to analyze the extent of the effect market sentiment has on predicting stock prices. The study conducts experiments on stock price data and tweet data from the Stocknet database. The Vader model and BERT model were used for tweet sentiment analysis, and this sentiment information was added to the relevant technical indicators and then input into the LSTM model for comparison with the original single LSTM model. The study found that (1) sentiment is information that should be considered in stock price prediction. (2) emotions can influence investors' judgment and further affect stock prices.