Can Twitter predict the stock market?

[Guest DanC]

The ECB recently commissioned a report comparing Twitter bullishness against Google bullishness and the results are very interesting. 

 

The full paper can be found here: 

 

http://www.ecb.europa.eu/pub/pdf/scpsps/ecbsp9.en.pdf?177000b829d4450b007f3d3a612cab18

 

Would you use it to gauge the markets?

[FiringSquad13]

I would perhaps Twitter and other social media / forums to gauge sentiment.  It is a useful platform to share ideas and get how other people are feeling about a particular market.  I suppose historicaly people might pick up the phone to share an idea or information, but with the expansion of technology it is not surprising that people share information this way.

 

What would concern me most Twitter in particular is that a lot of people will retweet a post, which could give a false impression of market activity and the volume of interest in that market.  But I do believe there is value to be had from using solcial media to gauge a general sentiment. 

 

I currently use various trading forums to discuss market activity.  I often see links to Tweets made by investors, traders and others.  I use Twitter to keep to to date with information from some of IG's analysts so it is definitely a worthwhile tool.  

 

I think it is important to know exactly what it is you would want to achieve from using Twitter.  I would never use it to make a decision on whether to trade a particular market.  I may however use it to identify an entry or exit point based on sentiment.

 

I wonder if other's would mind saying if they use Twitter and how useful they find it?  Are there any particular things that you look out for to help you trade better?

[Guest ProTrader]

I don't think Twitter can predict share prices, but it can give a good indication on sentiment. There are now Big Data companies in the USA that are actually collecting and using Data Analytics to get insight into the data for the specific purpose of analysing sentiment. I got an email from a company advertising this type of analysis for twitter about 4 years ago and thought it was nonsense, but I guess they were ahead of the curve, because this idea is now more mainstream and reality.

[Guest Condor]

are you in the Slack forum  ? I really think what they are doing is good.  It's really helped me but another tool/app urg! I havent used snapchat so i dont know what it does thats different to other apps/sites - i guess i'll have to take a look doh. C 

[Guest Condor]

it's easy just different channels for different topics  just like here really - i follow rolf style that is better for me, C

[Guest akatyk]

Thank you for pointing out Tradeciety. Interesting read and very informative.

 

For me, Twitter is a good source of news and trends.

[FGJB]

I can recommend the following book if you are interested in this field and you like Python: "Intro to social data for traders". It is interesting. It maybe useful for some traders.