There has been much talk about twitter changing and being the trendsetter for many trends. We have seen quite a few trends in the market which were affected and controlled by twitter. It can also be used by intelligent marketing gurus to sway the market in a direction that is most beneficial to them.
Predicting the Stock Market even 1-2 days in advance with precision will be a big success for stock traders and can be used to turn the tide towards their success. More and more people and organizations are turning towards social media to base their decisions on the trends that are the order of the day at that time. Twitter is the largest, most popular, widely accepted platform that has become a favorite with Top managers to base their decisions.
Just when you think Twitter is just people spewing their 140 characters in an effort to get ‘heard’, comes a new bombshell.
The study from the Technical University of Munich, which analyzed 250,000 tweets over a six-month period, found that an average return rate of 15% could be achieved by investors following stock market tweets.
Calling it a “legitimate source”, Timm Sprenger announced a “striking co-ordination” between what Tweeting investors were saying, and what market analysts were finding.
In a same manner many algorithms have been developed which can measure the trend and predict the market's position for the next 3-4 days. Social Media was initially sidelined by stock market observers but with these researches much stress is being put on the importance of these social networking sites to have an idea of the trend that would prevalent for a particular time period.
The reTweeting process put further weight on these stock-related tweets (which use the company stock symbols to differentiate them from standard tweets), showing others support certain predictions over others.
It is believed that people give a frank opinion on social media websites and have a tendency to give a true picture of the scenario present at that particular moment. Thus the credentials of this kind of information is far beyond doubt. Moreover the facts and figures are based on the updates that are there on the internet and can be checked and proven beyond doubt by anyone.
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