Social Media can Affect Market Behavior

[mumuy]

A recent study made by the Indiana University compared the change in the collective mood of Twitter users within 10 months of 2008 and the dynamics of the Dow Jones Industrial Average. It turned out that there is a connection between emotional state of bloggers and behavior of index. In 87.6% of cases, worsening the mood of bloggers, which scientist determined by keywords, led to the drop of the DJIA.


However, the scientist themselves are then said that the creation of a model to predict the rise or fall of the market was not their main purpose. Thus, it is possible that the Forex market is also suitable for this kind of analysis.

 

[Rambo35]

We are living in the information time and it is only natural that any type of media has an influence on (retail) traders. Most serious traders ignore what is happening in that space and trade their strategy.

 

[John_Davy]

Actually a lot. One click can turn the world around.

 

[Startanu]

Some traders finding in social networks many interesting for profitable trading. For example Financial Newswire

 

[Fxpipper]

While on one hand I do agree that the media will have an effect on users, not sure if it will have a domino effect on the markets since the market is driven by other forces including the elusive "feel good" factor.