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Using Social Media as a Way to Stay In Tune with the Markets

by | Tips & Strategies

New technology like social media can be a benefit to your trading and investing.In the days before the Internet, traders would spend hundreds if not thousands of dollars on Squawk Boxes and real time market information.Now you can get the same information on the internet and mobile phone applications like Twitter for little or no cost.Trading information is now available 24 hours a day and easily accessible from a cell phone or internet browser.The rejection of the U.S. debt ceiling plans, the Japanese tsunami crisis, and the Egyptian revolution were examples of market moving events recently broken on Twitter.In a business where it pays to know something first, the initial “tweets” news sources make provide those paying attention an opportunity that might not have been there just a few moments later. Twitter has quickly knocked down the information barrier that kept those in the know one step ahead, creating a more even playing field for other participants. Twitter is not something only kids use; it is something day traders and swing traders should embrace as well.

So how do you get started? The first step would be to go to Twitter and create your own account. Its free! Now that you have an account, you need to “follow” people who will disseminate information via the new medium. The people and news services you follow will be your window to the world, commenting and breaking news using tweets containing a maximum of 140 characters.

What news or people should you follow? Well, that is up to you. Who you follow will determine the tweets you see. From a trading/investing standpoint, following news services like Bloomberg, Reuters, or the Wall St Journal might be a good start. Of course, following Daniels Trading is highly encouraged. You can even use our Twitter page as a jump off point as you can see who we follow, and then you can follow them as well. Whatever you do, I would advise taking the following advice on how to use this new medium in regards to helping your trading:

  • Keep it simple from the start. Don’t follow too many people. There is no need to hear a repeat of news stories over and over. Fifteen people screaming the same news story can distort its importance in your mind.
  • Follow those who specialize in quick news dissemination. Try to tune out the noise and opinion, following every news reporter/analyst under the sun will cause paralysis by analysis.
  • Avoid cheerleaders. This will be very important as you begin to follow those who trade these markets for a living. There is no value in following a bearish grain analyst who is constantly complaining the markets are fixed against them as the markets rally. If the purpose of the use of the medium is to learn about the markets and be quick to hear about breaking news, hearing someone tweet over and over about how their losing position is because of a USDA conspiracy provides no value and can probably take away from the intended goal.
  • Follow both sides of the coin. Don’t listen to only the bulls or the bears. By following only one side of the trade you can lose the view of the other side. Being able to recognize the view of those who believe the world is ending along with those who think the world is perfect should provide you enough information to keep a balanced investment approach.

Remember, this medium is not only a receptor; it is also effective at putting you in touch with the experts who broadcast on Twitter. Have a question on the market or want to talk to someone at Daniels Trading? Go ahead and send us a tweet. We will respond. If you have a comment for someone at CNBC then tweet your opinion and it might get on the air. Getting answers can be that simple. Technology is changing the world, so you can either embrace it or get left behind. Sitting around and waiting for your nightly news brief from Brian Williams will leave you consistently behind the news cycle. In this market environment the news is breaking by the second, so use all of the tools at your disposal to stay on top of it. Twitter should be one of those tools.

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About John Payne

John Payne is a Senior Futures & Options Broker and Market Strategist with Daniels Trading. He is the publisher of the grain focused newsletter called This Week in Grain, along with being a co-editor of Andy Daniels’s newsletter, Grain Analyst. He has been working as a series 3 registered broker since 2008.

John graduated from the University of Iowa with a degree in economics. After school, John embarked on a 4 year career with the United States Navy. It was during two tours in Iraq and the Persian Gulf where John realized how important commodities are to the survival of society as we know it. It was this understanding that brought about John’s curiosity in commodities. Upon his honorable discharge in 2007, John’s intense interest in the world of commodities inspired him to move to Chicago and pursue his passion in a career in the futures arena.

After a three year position with a managed futures firm specialized in livestock trading, he was given the opportunity to join the team at Daniels Trading. Being in the business and seeing how other IB’s operated, it was the integrity and straightforward approach of the Daniels management team and brokers that attracted him to make the move. Since joining Daniels, John has broadened his fundamental and technical analysis of the markets even further. John has been writing his newsletter This Week in Grain under the Daniels banner since 2011.

Working in high pressure industries like the military and capital markets, John has learned the value of preparation in times of stress. He believes that instilling within his clients the value of a good plan and a cool head for dealing with the day to day swings of commodity markets. He treats every client as a teammate, understanding that his job is to help clients achieve their goals, whatever they may be.

John is a proud supporter of the Iraq and Afghanistan Veterans of America, the Veterans of Foreign Wars and the National Corn Growers Association. When he is not working, he enjoys athletics of all kinds and spending time with his wife and their two kids.

John’s commentary is featured in the following publications:

* All Ag Radio – Sirius Channel 80
* AM 880 KRVN – Lexington, Nebraska
* RFD TV
* Wall Street Journal
* Barron’s
* China News Daily (English version)

Risk Disclosure

This material is conveyed as a solicitation for entering into a derivatives transaction.

This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.

Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.

You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.