Financial News looks at the idea of traders using social networking sites to influence and develop their trading strategies.
The article specifically examines at how Twitter has evolved and the current scale and volume of the platform – a scale that has struck some traders and academics as a potential goldmine of trading information.
GreySpark maintains that while 6 months ago the use of social media in trading was irrelevant, today there is a growing momentum around trading from certain types of social media websites. This follows from the idea that trading from Twitter data has similarities to the phenomenon of machine-readable news-led trading strategies – both gather and analyse information, however the difference with social media platforms is this data feed is unstructured and unedited.
The article goes on to look at research conducted by the Indiana University in October, which showed how reading and categorising ‘tweets’ into one of a range of mood states – including calm, alert, sure, vital, kind and happy – it is possible to predict with 88% accuracy how liquid stocks will behave.