In part two of her review of using social networking sites to influence and develop their trading strategies, Michelle Price, Financial News examines how some in the financial industry question the robustness of the social media platform’s research ability.
Firstly, the platform’s short history makes it hard to correlate the information and it’s reliability, even more so that Twitter’s lifetime has mostly charted the Financial Crisis, a period of ‘bad news’ that has distorted the sentiment featured in its news feed.
Another reason is that the noise created by Twitter proves often a difficult barrier to overcome when looking for a refined trading signal.
GreySpark identifies that while using information from twitter is not revolutionary to trading strategies, it can be seen as evolutionary. Similar to a trading floor scenario, while a fund manager will not trade off one piece of information, Twitter can certainly help the decision making process.