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.
Basic Training for Futures Traders
This guide provides tips for successful commodity trading compiled from the advice of more than one thousand futures brokers. The top 50 of more than five thousand suggestions are included in this guide.