WallStreetBirds taps Twitter data for stock tips

Really? Because I have #LondonRiots trending on my UK trending chart and over the weekend it was #woodgreen.

"Stock picking engines rely on their ability to sift throught the general noise and zero in on the hard signals that matter." That is exactly it. That is how these 'stock picking' engines work. 

The argument "But what if Twitter has become the preserve of the chattering classes, clogged with an endless stream of self-congratulatory tweets from total strangers pretending to be best mates?" doesn't make sense when talking about a 'stock picking' service. It's kind of like saying: 'that new fruit & veg stall down the road will never work, because that poncy pub on the corner is full of wankers.' The reasoning doesn't link up. 

I guess two academic studies should be disregarded? The real proof is if any of these firms/services make money. I just hope if that happens no one celebrates with a 'self-congratulatory tweet'.



Twitter is just one place that conversations take place. There are lots of other venues too (both online and offline). But Twitter happens to be public and available in a easily analysed format. I wouldn't write it off so quickly.

I'm guessing there are lots of people looking at this potential use of social data. Using Twitter (and other sources of public, conversational data) for stock trading is an issue of being confident in sentiment analysis, and the ability to differentiate between noise and signal.

Brands have been trying to apply similar technologies to determine issues of consumer perception, sentiment and real time reputation management for quite a few years now. Most are doing something with one of the multiplicity of vendors in the area. But no-one has really nailed it yet. They tend to sound good on paper but scratch at the surface of sentiment analysis, and the data doesn't really stand up in court, or it requires considerable human interpretation to be added.

I'd suspect a similar evolutionary cycle with the application of stock trading using social data. The great thing about stock trading though - as Liz points out - is that there is a definitive measure of success: did it make money? Whereas insight on sentiment will always be subject to debate and contrary viewpoints.