How to Use Social Media to Monitor Your Stock Trading

Trading stocks has always been a very social activity, whether it was done traditionally at dinner parties, investor clubs, or business boardrooms.

With the advent of social media, however, stock trading has become more social than it has ever been since the advent of the stock market.

As new social tools and channels emerge, they bring with them new methods of utilizing social media to monitor your stock trading investments. A good way to determine which tools to use, and what searches to employ, is to focus on your goals as a trader, or possibly the purpose of individual stocks or portfolios.

Purposes and places

Are you trying to determine when a stock is falling out of favor with investors, and planning to marry that gut feeling with qualitative data to sell off before a large number of other investors do? There’s no better tool for that than Twitter, where you can search by stock ticker as well as by company name.

Similarly, Twitter provides an excellent avenue to identify positive sentiment and hard-to-find perspectives and opinions regarding stocks that you might want to buy. Typically, there are lots of people with a stake in a stock who might be trying to feed their own investment return; but it’s possible that a user’s positive comments might inspire you to notice an overlooked attribute that makes the stock a good investment.

By monitoring Twitter and similar social forums, you might find out breaking developments sooner than other investors come to the same realization, and reap a better return.

But don’t count out Facebook, which recently rolled out some Twitter-style features, like the ability to search by hashtag. Facebook has hundreds of millions more users than Twitter, so using it to research negative as well as positive sentiment from fellow investors and market makers might be a good idea.

Blogs are another element of social media that are taking the investing world by storm — in a good way. Reading blogs to learn from investment strategies, debate specific stocks, and really challenge assumptions about investment behavior overall, is a great way to monitor your stock trading investments.

Forums like Trading Concepts offer that type of learning and social environment, as well as mentoring opportunities. Other forums on popular sites like CNN focus on macro-level issues that could affect your portfolio issues.

Drew Hendricks is a professional business and startup blogger that writes for a variety of sites including The Huffington Post, Forbes and Technorati. Drew has worked at a variety of different startups as well as large advertising agencies.