People feel insecure when making important decisions and tend to seek support from the outside world, and novice investors are no exception. Frankly, the less experienced a person is, the more they depend on external information, whether it’s bloggers, social networks, news, or any technical indicators. Besides, the more experienced a trader is, the less time they spend on such activities, being fully aware of their futility.
“Those who can, do; those who can’t, teach” is a saying relevant to the market, too. Nearly every blogger in the media space who makes videos or writes about investing isn’t a professional investor earning solely from speculation but is simply trying to create hype over financial topics for the sake of third-party income. Such are commonly referred to as “wannabe marketers.” Needless to say, it’s hardly useful to consume such content because listeners will get native ads in addition to the usual ignorance.
Some attempt to consider sentiment on social media by conducting sentiment analysis, however, even that rarely bears fruit. The thing is that most of the posts on Twitter or Reddit, which are used as the most active platforms, are banal spam — posts like “BTC TO THE MOON” or shilling specific projects. Posts are also a reaction to events that have already happened: the response to bad news is inevitably negative, while the reaction to good news is positive. Therefore, the tone of posts can be used only as a small detail of a large-scale trading mechanism, but not as something independent.
In other words, you shouldn’t rely on social networks at all. At most, you can subscribe to executives of major projects, like Binance and Ethereum, or the most well-known investors, like Michael Burry, to quickly get important information for thought firsthand.
(If you want to discuss the column’s topic with its author, Anton Bykov, Senior Analyst at Esperio, you can email the editorial team at media@coinspaid.com — ed.)
