Saturday, June 20, 2009

Twitter and Decision Support for Traders

A while back I posted my ideas regarding Twitter as a kind of daytrading analyst: a tool of decision support for traders. This fits with the recent ideas on the blog regarding social cognition; it is also almost singlehandedly responsible for the recent growth in traffic on the blog, as I've linked intraday market tweets to real-time charts and posts concerning market action.

A majority of the intraday tweets and posts are written while I am working with prop traders, so that I am able to share many perspectives from this real time experience. (The multitasking can be challenging at times!). The tweets and posts synthesize what I am seeing on the screen, what I'm observing among the traders, and what I'm hearing from colleagues who talk with me through the day.

Let's take an example from Friday's trade. We started the day trading higher, and the market looked strong, with over 1700 more advancing issues than decliners. Take a look at my tweets beginning just minutes after the open:

8:40 AM CT - Mixed sector performance so far; range trade from open; XLY, NQ strong; financials weak. Bk l8r

8:47 AM CT - 23 stks up, 17 dn from open; my basket more mixed than one would think; NQ rel strong. VWAP near 920

8:49 AM CT - TICK quite strong so far this AM; but volume at offer and bid pretty even so far in ES; broad mkt stronger than big caps

9:16 AM CT - That disparity between ES and small caps & between TICK and Delta has been informative; selling has entered mkt, now belo vwap

You can see that as the first hour of trading unfolded, it became clear that this was not a trending market: all sectors were not moving in unison. Traders who recognized this dynamic were not fooled by the market's subsequent retracement of strength in the afternoon.

One trader put it this way to me: He is looking for facts, not opinions. The key to the Twitter postings is providing timely, relevant facts that might otherwise escape the attention of the trader. The trader can then use his/her experience to incorporate or discount those facts, depending upon circumstances.

Over 5000 traders now subscribe to the "Twitter Trader" posts. During the past month or so, it has become what is probably the only free, real-time posting of trading-relevant information that reflects the thinking--and observations--at professional trading firms. You can subscribe to the tweets via RSS or follow on my Twitter page; alternatively, you can check out the latest five tweets on the blog page under "Twitter Trader". Either way, you'll find links to trading-relevant blog posts and articles from the mainstream media; indicator updates and profit targets prior to the market open; heads up notices on pending economic releases-- as well as those intraday analyses.

And I hope to be pushing the envelope still further in the months to come. Thanks for the interest and support; I benefit from your feedback (and from links to interesting posts and articles that you email me!) and appreciate the communication.
.

3 comments:

Trader Kevin said...

"You can see that as the first hour of trading unfolded, it became clear that this was not a trending market."

My first indication that it wasn't a trending market was when I looked at the calendar and saw it was a major expiration day. Typically they move a big block of stock at the open and another block at the close, without a whole lot of action in between.

BD said...

Beg to differ with you on that. Boston Wealth Management, LLC, provides real time buy and sell on Twitter every day with a day trading record of on average 20 successful day trades before a loss and have been doing so for the last three months.

https://twitter.com/BostonWealthMan

Dave said...

As someone who has little time to actively monitor the markets intraday, I have found twitter to be an invaluable resource. I have a small group of followers and since I know someone's interested in my TA work, it forces me to be selective/disciplined about what I tweet when I am monitoring the market, which in turn helps me better organize my thoughts (e.g. what is intermarket analysis suggesting, average intraday ETF performance, bid/ask volume, TICK, etc.) before I take a trade (or not).

Glad to hear it's been an asset to you as well.

Regards,
Dave