WHEN the social media site Twitter started making headlines, the cynics came out in force to lambaste it. Most jibes were based on the myth that people were only tweeting and following the mundane – they were then ignorant of the fact that some of the world’s great thinkers were using the site. Most of its former detractors are now signed up members of the site and its reach has permeated every industry, with increasing numbers of people using the site to receive and pass on information.
Twitter is transforming retail trading – which is why the subject of social media will be debated at City A.M.’s Active Trader event on 24 May – www.cityamactivetrader.com.
OUT WITH THE OLD
New technology disrupts the status quo. Angus Campbell, head of market analysis at Capital Spreads (@CapitalSpreads) explains that “Twitter is now playing an important role in trading, as it is a quicker medium of communicating than blogs and emails.” He says that you only need one sentence on something important and, before you know it, the news could be re-tweeted widely across the Twittersphere, leading to followers clambering for the buy or sell button.
Craig Erlam (@craigerlam), market analyst at Alpari (@AlpariUKForex), thinks “the way people share their trading ideas is going through a big transition.” He says a consequence of the rise of Twitter is the declining necessity of going to trading clubs to share ideas on where the market is going and where trades have gone wrong: “Thanks to Twitter, an inexperienced trader can have access to up-to-the-minute analysis, charts and thoughts of a professional in London or New York from the comfort of their own home.”
Michael Hewson (@michaelhewson), senior market analyst at CMC Markets – who is widely followed for his informative and sardonic tweets on the Eurozone’s woes – suggests keeping lists to manage who you follow. With the help of TweetDeck – a dashboard application for managing your account – he keeps two lists, which narrow down the tweets received. He also suggests following journalists – particularly those close to action. For example, he follows @YanniKouts, @EfiEfthimiou and @MatinaStevis to be one step ahead of the crowd on the Eurozone crisis.
The integration of different social media is the future. Sites like the social trading and investment network eToro, which allows users to follow and copy other users’ trades, are blazing a trail. This is why Yoni Assia, its chief executive, will be speaking at Active Trader.
Erlam thinks it’s only a matter of time until brokers will provide a platform that includes social media. Whether Twitter plugs into that, or it runs on internal social media – like eToro does – is a question that can only be decided by the traders themselves.