🦃 Happy Thanksgiving! 🦃
Since the market is closed, you might find yourself with some extra time to scroll social media today…
So I want to talk about whether the power of social media can give you an edge in your trading.
Social media platforms like X (formerly Twitter) are where a lot of traders get their information when they first start to trade…
They might not even know what a scanner or a screener is.
Think back to the mayhem that was 2021 … People who had never bought a stock in their life were opening broker account apps on their phones and buying any stock they heard about on Twitter or Reddit.
And some people made a ton of money.
So is it possible to get good trade ideas from social media?
Let’s dive into the playbook and I’ll give you my tips to help you navigate the current social media landscape.
Should You Use Social Media to Find Trades?
Back when I first joined Twitter in 2008 or 2009, it was a game-changer for traders.
We called it Fintwit, and the dollar sign as a cash tag wasn’t even a thing yet…
It was the hub for traders sharing information and collaborating.
Back then finding shares to short was like searching for treasure. Brokers with locates were like gold, and Twitter became the platform where traders exchanged valuable insights.
The collaborative environment made it easier to stay informed about potential trades.
However, as with anything, the spammers and imposters started infiltrating, and the dynamics shifted.
So here are my three tips to help you navigate the muddy waters of social media as a trader.
Lesson 1: Recognize the Agenda
As social media platforms expanded, so did the number of users with their own agendas.
Now, everyone has a motive.
Whether it’s pumping, bashing, or spreading misinformation.
It’s not a collaborative group effort where traders try to help each other.
It’s full of people with their own agendas to separate you from your money. They’re out there to try to take advantage of you…
Think about it this way … Why would someone keep posting the same ticker and news repeatedly?
Do you think they’re out there giving out good trade information for free? Do they care if you make money and succeed?
They’re probably just trying to convince you that whatever they’re pumping is a good stock or company because…
- They’re holding the stock themselves and want to pump the stock price higher to make more money …
- They have a losing position and want to get out, for at least break even.
The best way to approach any trade ideas you see on social media is to always read and interpret news for yourself.
Stay skeptical and do your own research.
Lesson 2: Watch Out for Spammers and Imposters
The social media landscape has become cluttered with spammers and imposters.
Be cautious of new accounts or those with suspiciously long usernames. And ignore any DMs from people who say they will manage your money for you.
Pay close attention to usernames or look for verified accounts to make sure you’re following the right people.
And follow accounts with a substantial following that offer valuable information rather than just basting out random tickers. When looking for news, stick to credible sources…
All of that can help you filter out the noise and keep your social media circle focused on quality over quantity.
Lesson 3: How Social Media Is Useful Today
Unfortunately, the usefulness of social media for trading has diminished over time.
Twitter, once a powerhouse, now has limited utility due to spammers. Even platforms like WallStreet Bets on Reddit had their heyday but fell victim to spam and scams. And TikTok has struggled to offer valuable trading information.
But despite the challenges, social media remains a decentralized source of information.
Embrace this power but stay vigilant.
Use the tools wisely, but don’t fall in love with an idea. Always verify and track information to ensure it aligns with your trading plan.
Social media can be a valuable asset in your trading toolkit. However, it comes with challenges, and not everything you read is gospel.
You can find a lot of random tickers and opinions on social media…
It’s up to you to be a free thinker, track ideas, and most importantly, stick to your trading plan.
If you struggle to filter through the noise and stick to your plans, the best solution I have to offer you is to check out the Daily Income Trader system.
It’s a system that I’ve built over the last eight years that uses a lot of trading tools…
The Breaking News Chat is run by two 25-year Wall Street veterans who filter down news into the most important headlines that can move stocks.
We also use our powerful Oracle algorithm that shows us some of the hottest stocks of the day to focus on.
Plus, the StocksToTrade platform offers tools and indicators that are unmatched by others.
So if you’re bag-holding a stock right now or you keep falling victim to social media scams — check out the Daily Income Trader system today.
Have a great day everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade