When I started my research on trading, I got the impression that using social media is not only quite useful, but almost essential to develop as a trader. Now that I have dabbled with the whole thing, I am in two minds. A newbie should be careful.
- Free information: Training providers are avid users of social media as their sales channel. Luckily, one way of enticing us to buy their stuff is by giving away tons of free blog posts, infographics etc. Other non-commercial traders also happily share their insights.
- You’re not alone. Some traders are pretty honest about their experiences. It’s good to know that you’re not alone in pain and joy.
- Support: I get the feeling that there is quite a supportive global community out there. On the free platforms I have tried, it seems like you can freely ask questions and usually somebody tries to be of assistance. There are also paid chatrooms. If you believe the ads and tweets, some of these seem pretty helpful.
- Ideas: Other people’s alerts and chats can give you trade ideas when you struggle to find stocks to trade.
- Quality: It is hard to assess the quality of the posted information when you don’t know the author. Do they know what they are talking about or just pretend?
- Scam and ads: Some posts pretend to be helpful but, in effect, just want to flog you some expensive stuff or aim to pump and dump a stock.
- Context: Some genuine posts, especially comments on stock performance, are simply situation-dependent. However, the context is rarely obvious. For example, somebody might be bullish on a stock and rave about it. So, you think you must buy the thing right now before it surges any higher. Then it might make another little move up before dropping below your buy price. It doesn’t necessarily mean that the person was wrong or wanted to trick you. They might have gotten into that trade ages ago and were just celebrating their joy about being in profit on social media. You got fooled by assuming that they were in a similar situation as you.
- False reassurance: Seeking opinions on social media is a double-edged sword due to the factors listed above. Sometimes when I am unsure about taking a trade I glance at other people’s comments. I have caught myself simply looking for reassurance that there is somebody else out there thinking the same, ignoring opposing views, in order to justify the decision to myself.
- Time: OMG, I’ve wasted so much time on social media lately. It’s so easy to get sucked in and keep scrolling and clicking.
Places I went
As you’d expect there is all sorts of info on Twitter – charts, random chat, links to blogs, sales tweets, news, scam, …
I use it occasionally to find opinions on an equity. You search or tweet about these by typing the dollar symbol, e.g. $APPL. People also share links to their blogs or post educational images. I find this very useful. At the moment, that’s the kind of users I tend to follow. They enrich my feed with information. That’s what I’m after. Just now, this is not an account I use to socialise.
If you fancy, you can find me at @kristokks.
After a while of coming across tweets that weren’t Twitter tweets, I finally tracked down StockTwits. It’s much more focussed that Twitter. Loads of chat about specifc equities and screenshots of charts along with people’s analyses. It has built-in functions like a real-time customisable watchlist, trending stocks and so on. I have barely explored it beyond the general chat and the watchlist.
In my very early days (literally days) I have allowed myself to be led astray by other’s opinion naively assuming that they knew more than me. As a result, I made some stupid buys. That’s why I decided to stay away for now unless I want to check opinions on a specific equity for some reason.
I have the same user name as on Twitter.
It’s a closed but welcoming group. I just recently joined. There seems to be some good support between users. The conversations I have noticed and sometimes joined where mostly about finding resources or getting opinions on various topics around trading, less about technical stuff. I think Aaron, the host from Chat with Traders, also uses it to get ideas for new podcast guests etc.
Even before I started trading, I enthusiastically opened a free account with Profitly. In the end, I have never used it. I’m not even sure how much use you can make of the free version. There are loads of other chatrooms out there. Pretty much every training provider has a chatroom. Even my charting platform, TradingView, offers an interactive space to post and comment on ideas, and you can hook up to StockTwits. Again, I’ve barely used those functions so far.