A key to weathering – and potentially profiting from – a market correction is planning and implementation.
How Can Social Media Help Your Trading?
Let’s get the obvious out of the way: Social media has woven itself into the fabric of cultures around the globe, and that certainly includes the worlds of finance, economics, trading and investing. So what does that mean for you, as a trader?
Well, it means you have instant access to the collective wisdom of tens of millions of people who can offer help, information and support. In trading, where nanoseconds can make the difference between profit and loss, such information can be powerful. Social networks can be the first place you learn about crucial, price-moving news about a company.
On the other hand, social media also exposes you to crooks, cranks and the uninformed.
“When it comes to your trading plan, you probably should look at social media with a cautious eye,” said Brian Bachelier, vice president of active trader strategy at Scottrade. “It can be difficult to verify the source of any information that might come from Twitter, Facebook or even a social network set up specifically for traders.”
What’s Out There
The use of social media has come a long way from electronic bulletin boards in which essentially anonymous people offered stock tips. At times, those boards were co-opted by individuals hoping to manipulate prices of stocks for their own illegal gain. (In fact, even today, investors and traders should beware of anyone pushing either buying or selling of thinly-traded stocks where prices are highly volatile.)
Today, social media has moved to large trading and investing networks, typically hosted by standalone companies or brokerages. Each of those networks offers a variety of services to consider. Among them:
- Social interaction: This is the sharing of ideas and thoughts on an endless variety of market, securities and economic issues.
- Brokerage: Some networks offer direct access to buying and selling – allowing the discussions to turn into direct action.
- Autotrading: Is there a particular trade that someone you respect or follow has made? Autotrading lets you copy that same trade in your own account.
- Mobile trading and investing: If you spend most of your time trading or investing on a mobile device, then you probably would want to pick a site that’s optimized for on-the-go social interactions.
Social Media at Scottrade
Scottrade® clients have access to StockTwits® on its trading platform. Once you integrate StockTwits into your Watch List (by clicking “Edit” on the Watch List widget), you can view posts about stocks on your list.
In addition, Scottrade regularly shares educational financial content on the company’s Facebook and Twitter accounts and interacts with clients on these forums as well.
“For traders, quality information about a security is more crucial than volume,” Bachelier said. “And all information should be viewed carefully. You should determine if it’s coming from a credible source – whether it’s a tip from your uncle or an accomplished trader sharing ideas on a social network.”
All investing involves risk. The value of your investment may fluctuate over time, and you may gain or lose money.
The content provided is for informational and/or educational purposes only. The information presented or discussed is not, and should not be considered, a recommendation or an offer of, or solicitation of an offer by, Scottrade or its affiliates to buy, sell or hold any security or other financial product, or an endorsement or affirmation of any specific investment strategy. You are fully responsible for your investment decisions. Your choice to engage in a particular investment or investment strategy should be based solely on your own research and evaluation of the risks involved, your financial circumstances, and your investment objectives. Scottrade, Inc. and its affiliates are not offering or providing, and will not offer or provide, any advice, opinion or recommendation of the suitability, value or profitability of any particular investment or investment strategy.
Scottrade and StockTwits are not affiliated. Third-party websites contain information that may be of interest or use to the reader. Third-party websites, research and tools are from sources deemed reliable. Scottrade is not involved in development of content on third-party websites, does not guarantee accuracy or completeness of the information presented, and makes no assurances with respect to results to be obtained from their use.
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