How to Execute a Repeatable Twitter-based Investment Strategy
As an update to our previous post, where we highlighted the types of tweets that can move the market for stocks, this article will focus on how you can turn these tweets into repeatable profit opportunities using TweetTraders.
Previously, we illustrated how President Trump’s tweets about the steel and aluminum industries, resulted in an immediate single-day profit opportunity of between 4–13% on four different US-based steel company stocks.
To recap, on Thursday, March 1st at 7:12 AM ET, President Trump tweeted that the steel and aluminum industries needed “free, fair and smart trade”, adding to expectations he would announce tariffs on foreign imports.
Investors targeting US-based steel companies immediately took notice.
In the day of trading following the tweet, AK Steel rose as high as 13.2%, with US Steel, Steel Dynamics and Nucor Corporation following suit with gains of 9.49%, 5.06% and 4.39%. The stocks then rolled over on Thursday after CNBC reported that an announcement on [tariffs] was “unlikely.”
But how can you turn this one-off comment into a repeatable trading opportunity?
This is where setting real-time alerts based on a refined key word search using TweetTraders can help you bring actionable intelligence into market moving events. We help filter the value from the noise.
Using the steel stocks as an example, it was easy to identify that the keyword that moved the market in President Trump’s tweet on March 1st was “trade” or the implication of “tariffs.”
Using our intuitive UI, you can quickly set an alert to receive a text notification using Twitter user @realDonaldTrump and the keywords “trade” and “tariff.”
With this alert set up, fast forward to Saturday, Sept 8th at 10:45AM ET when President Trump tweeted that Apple prices may increase as a result of new tariffs imposed on Apple’s China-based suppliers.
The trigger set up in TweetTraders would have provided the following alert:
It is clear that Apple and its suppliers may be negatively impacted by the tweet. While Apple is clearly in the crosshairs, it’s often as easy as a simple Google search to find the rest of the profit-making puzzle. In fact, the top Google search results provided the name of a few of Apple’s notable China-based suppliers.
The notification also gives direct execution guidance to traders:
“90% of the time this tweet has moved US Steel 5.32% within 23 hours”
This means that 90% of the time, the stock for US Steel reacts to President Trump using the keywords “trade” or “tariff” in a tweet via a (+/-) 2% price change in the next 48 hours and when it does, the stock typically increases 5.32% with the inflection point at 23 hours.
While not a direct comparison to how the stock price for Apple and its suppliers may move, it does offer some helpful execution parameters on what to expect and when.
The Results
The trader that took advantage of this opportunity could have reaped significant rewards as a few of Apple’s key Chinese suppliers declined between 10–20% in the next two trading days. Apple also had a notable decline of nearly 2%, particularly in light of its massive market cap.
To find these sort of profit opportunities for both stock and cryptocurrency, please sign up at TweetTraders.com to become a free beta user. We will be giving all platform functionality away for free while in beta. All we ask is that you sign up for our early access waitlist. Only those users that sign up will receive free access.
TweetTraders
Twitter is the source of real-time information, and TweetTraders is a platform that allows investors to profit from news the instant it is made available. Through our easy-to-use interface, users can quickly validate trading strategies related to how news can impact stocks or cryptocurrencies and set up real-time alerts for actionable insights that lead to profit. More importantly, with historical data down to the minute, TweetTraders improves trade execution by giving insight into when to buy or sell based on past trends.
Kernel
TweetTraders is powered by the Kernel platform. Kernel is a streaming data integration and rapid application development platform built by Ennate that allows you to make complex data-driven apps 10x faster. For more information on the power of our data connectors and lower-code application development process, visit ennate.io.
