I’ve been a proponent and user of StockTwits/Twitter for a few years now and have learned a lot as well as made some great relationships. I’ve been able to meet in-person some of the people I know from the virtual trading world while others I haven’t, yet share a lot with them via email, Skype, etc. Back in the day you used to have to pay a fee to gain access to a “trading room” where you’d gather together with other local traders and share trade ideas along with bandwidth. StockTwits/Twitter is truly an awesome medium, but caution is warranted.
One concern I have is that I see some get on the stream and take trades or base trades off of a tweet. That’s the furthest thing from risk management and I’ll venture a guess and say it’s also not how Howard or Phil want you to use the stream. To use StockTwits effectively takes work. The first step is to find out who to follow, which isn’t easy. Here’s a few of the items I look for when deciding who is stream worthy.
- Do they have a bio?
- Do they have a blog?
- Will they entertain dialogue either on the stream or via e-mail?
When I look for the above items I’m wanting to answer some questions. What is their primary time-frame for market participation? How do they manage their risk? What types of instruments/markets do they trade? What types of indicators do they use? There are lots of questions I’d like to know the answers too, I guess that’s my training as a shrink shining through.
StockTwits/Twitter can become addictive, I witnessed it in others as well as in myself. It’s important to use the stream as you would anything else, in moderation. Some times it pays to just unplug and hit refresh a few days later.
Here’s a little “trick” that I use to help me decide whom I will follow. You can visit that user’s twitter page and add them to a list without following actually following them. I have a few lists that I do this with and once I see that an individual would add value to my stream I follow them.