How To Use Twitter For Trading

Traders have long used Twitter to research market trends and gain insights into retail investors’ appetites. However, integrated TradingView charts and a partnership with the trading platform eToro, demonstrate the site’s ambition to become an investing hub. This tutorial explains how to use Twitter for trading, from accessing breaking news to the best trading accounts. We also unpack the pitfalls to avoid when trading with Twitter.

Trading on Twitter is risky due to fake news and misinformation.

Instead, consider brokers with social trading. These platforms allow users to interact and exchange ideas, similar to Twitter, but they are designed specifically for online trading.

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From Politics To Trading

Early History

Twitter began its life in 2006 during a brainstorming meeting held by board members of a podcasting company, Odeo. The original idea came from Jack Dorsey, then an undergraduate student, who envisaged an SMS service that could be used to communicate with a small group of people.

In the following years, celebrities, politicians and many other public figures started tweeting and the site’s daily usage climbed from around 40,000 tweets a day in 2007 to 500 million in 2022.

Twitter’s profound influence has been seen in the political upheaval of the Arab Spring in 2007, as demonstrators used social networks to highlight abuses and organise anti-government protests.

More recently, governments relied on the fast and powerful reach of tweets to address crises like the Covid-19 pandemic.

Financial Twitter

But the site’s reach is not limited to politics, and communities have come up for almost any interest imaginable, including online trading.

Financial Twitter, or Fintwit, is the name for the global community who use Twitter to discuss all things finance, investment and trading related. The most-discussed Fintwit topics today can be found using Twitter’s hashtag (#) function or by searching through relevant trending topics.

Fintwit hashtag on Twitter

A related Twitter community, Crypto Twitter, uses the social media site to discuss everything related to cryptocurrencies.

Crypto Twitter has been instrumental in generating the hype that has sent tokens to stratospheric price gains, as well as popularizing crypto-adjacent assets such as NFTs.

How To Use Twitter For Trading

With presidents, CEOs, billionaire business owners, day traders and finance scholars among the millions of users tweeting every day, Twitter offers some useful content for online traders.

The basics that traders can use to reach this content include:

Through these tools, Twitter can be used to help with trading in three main ways:

  1. Following ‘Experts’ – Find knowledgeable traders, analysts, journalists and other experts and follow them. The more you engage with experts’ content, the more it will appear on your Twitter feed. Note, users will need to do due diligence to verify the quality and accuracy of information.
  2. Researching Trends – Twitter offers numerous ways to gauge market sentiment and the mood among online traders. Following hashtags and checking replies to tweets about trading are simple ways to get a feel for market sentiment, but there are more sophisticated methods.
  3. Reaching Breaking News – Twitter delivers breaking news, making it a useful tool for retail traders who need to react quickly to market events.

Following ‘Experts’

Before social media, retail traders were limited to the analysts on the television, print and radio sources available to them.

With Twitter, you can find and follow a much broader range of opinions, allowing you to hone in on analysis of the specific markets, assets or instruments you want to trade.

If your trades involve a specific country, region or currency pair, political analysts or journalists from the relevant countries could be useful sources for analysis.

Likewise, tech journalists, experts and academics can help you get a head start on the newest products or companies generating market buzz.

You may also find staff and even CEOs of companies you are interested in on Twitter, and following these can help you evaluate whether you want to invest or not.

Follow experts who offer insightful advice or have a unique perspective on one of your areas of interest and note the accounts they interact with for hints of who else to follow.

Some Twitter personalities are also quite responsive to questions from their followers – so you might be able to get their opinion on a topic of interest by tweeting at them or joining a Twitter Space they are involved with.

However, virtually anyone is free to post their opinion on a market – this does not necessarily make them a credible voice nor does it mean the content they post is accurate.

Best Trading Accounts

Twitter provides a place to research and follow trends thanks to its hashtag and cashtag functions and powerful search tools. These can help you gauge market sentiment about an asset, sector or region that you’re interested in.

Searching for keywords or hashtags will give you an idea of how popular a topic is, but it will also show you who is talking about it and what they are saying.

Some of the most significant trading events in recent years have been driven by trends on social media. The rise of meme stocks like GameStop in 2021 was a striking example of this, as were the huge gains made by popular crypto tokens such as Dogecoin, driven in large part by meme posts on Twitter.

But relevant trends don’t need to be specifically about trading. They could be about an upcoming vote or another anticipated news event that will have a knock-on effect on markets.

If you have a significant vote coming up, for example, Twitter can be useful for gauging the public mood and could help you plan trades that may be affected by the outcome.

Importantly, this is not a scientific method to forecast upcoming events, but it can be useful to traders alongside supplementary analysis and specialized trading tools.

Another benefit of using Twitter to research trends is the site’s integrated apps, including charts from TradingView and compatibility with eToro. Traders can navigate from Twitter to their eToro account to trade an asset with one click. Additionally, users of Twitter’s Android app can automatically access the TradingView chart of supported assets by clicking the cashtag.

TradingView Charts On Twitter

Breaking News

It can take hours for stories on breaking news events to be published on traditional news outlets, but on Twitter as long as someone is present and tweeting, you can reach them instantly.

Famous occasions when a story broke on Twitter first include the Hudson River plane crash in 2009, the London G20 riots the same year, the beginning of the Arab Spring in 2010, and Turkey’s 2013 Gezi Park protests.

Likewise, important announcements related to business often break first on Twitter, be it through a journalist tweeting from the scene of a negotiation or from an important figure tweeting themselves.

A good example of this came during the Brexit trade negotiations between the UK and EU, as political correspondents were usually the first source of news on the progress of talks, and they often tweeted their impressions before filing them in a news story.

This can be useful for day traders, as it could allow them to catch the beginning of a profitable trend or reversal early.

The flip side of this is that Twitter is also home to a great deal of misinformation – the notorious fake news – as well as popular accounts that may be tweeting sincere impressions but getting them wrong. Traders should practice caution and ensure they trust the source before acting on breaking news they find on Twitter.

How Not To Use Twitter For Trading

Like any other tool, Twitter needs to be used correctly to get any benefit. And using this social media site irresponsibly when making trades can be dangerous.

For every trustworthy expert or honest trader, there is at least one bot account or shill looking to promote a worthless stock or crypto.

Likewise, trending topics can be manipulated using botnets or other tools that generate large volumes of tweets.

Besides that, scams are frequently run through Twitter, often through fake accounts posting replies to popular trading personalities and sometimes through accounts posing as the personalities themselves!

You can protect yourself while trading on Twitter with the following precautions:

Alternatives To Trading With Twitter

If you’re looking for an alternative to trading on Twitter, you might think of one of the other popular social media sites, such as TikTok and Reddit. However, the best alternatives to using Twitter for trading are often available at online brokers.

Reputable trading firms such as CMC Markets and Pepperstone provide excellent resources, including news feeds, powerful trading platforms with charting tools, expert market analysis and educational resources.

Importantly, curated analysis content provided by these brokers cuts out some of the risks posed by unknown accounts on Twitter, and there will be far less random noise to deal with.

Additionally, you may become a better trader by making use of the educational content and grappling with all the analysis features on the trading platform. This in turn will help you recognise good (and bad) trading advice available on sites like Twitter.

Another option is social trading. These increasingly popular platforms allow beginners to replicate the trades of profitable investors. Brands, including CMC Markets and Pepperstone, also allow users to interact, swapping tips and insights, similar to Twitter. The key difference is that they are built and used solely for trading.

Trading Forum On CMC Markets
CMC Markets Chat Forum

Trading Twitter (TWTR) Stock

As one of the world’s leading information networks with around 500 million tweets per day, Twitter has had an eventful life of its own on stock markets.

The company filed its IPO on the New York Stock Exchange in 2013, climbing from an initial share price of around $40 to above $64 in January 2014 before plummeting to around $15 in 2015.

Twitter’s stock spiked to an all-time high above $76 in 2021 before falling to around $35 within months. A year later, billionaire and avid Twitter user Elon Musk bought the company for $43 billion, or $53 per share, ushering in a new era for the site as old staff and policies were replaced by those of Musk’s choosing.

With a huge outlay to recoup, Musk began tweaking and expanding the features offered by Twitter, and this included some exciting developments for traders, including charts from TradingView, a collaboration with Israeli online trading broker eToro, the prospect of cryptocurrency integration, and more. Ultimately, Musk’s vision is to turn Twitter into a “super app”.

Final Word On Trading With Twitter

Twitter is a popular social media site that offers opportunities to traders, but it does not come without risks. Twitter traders should strive to only follow trustworthy accounts and ignore self-interested influencers or bot-driven trends.

For many, the best practice is to rely on a broker for traditional trading purposes and to use Twitter as a supplementary news source and research tool.

FAQs

How Do You Use Twitter For Stock Trading?

You can use Twitter to look up the latest news about companies, sectors or geographical regions and learn about developments that might affect stock prices. You can also follow ‘experts’ to get their opinions about the latest market news and company reports.

But while Twitter can be a useful resource for retail investors, you should ensure that you are knowledgeable about stock trading before you make any trades based on information on Twitter.

Should Beginners Use Twitter For Trading?

It is possible for beginners to use Twitter to trade, but it isn’t advisable. There is a lot of misinformation floating around Twitter, and this could lead to poor trading decisions.

It would be better for a beginner to learn to trade on a demo account before making use of Twitter to inform their real-world trades.

Alternatively, copy trading allows novice investors to follow the strategies of profitable traders while also exchanging ideas and tips.

Who Should You Follow On Twitter For Day Trading?

To make the most of Twitter, follow famous traders in the assets and regions you are interested in. These may give you insights into short-term market movements that are useful for day trading.

Popular trading accounts on Twitter include @JimCramer (day trading CNBC host) and @PeterSchiff (Euro Pacific economist).

What Exchange Is Twitter Trading On?

Before Elon Musk bought Twitter in 2022, the company was traded on the NYSE. However, since Twitter became a private company, it is not traded on any exchange.

Why Is Twitter Not Trading On The Stock Market?

Twitter is a private company since Elon Musk’s buy-out in 2022, so you can no longer trade Twitter stock on any exchange.

Article Sources

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