Social media has been a huge phenomenon in this decade. The entrance of social networking sites into the web has seen the world change dramatically. While social platforms started as websites where people would connect with their loved ones, they have grown to become big companies that use data at the core of all services. Indeed, social media platforms like Facebook and Twitter have grown so huge that they employ thousands of people around the world. The most interesting aspect about these websites is the power that they possess as a result of having huge amounts of user data. Because of this power, social media sites have become an important source of influence on the markets.
The Power of Social Networks
To understand just how much power social media sites have, let’s consider a platform like Twitter. Twitter was launched in 2006 at a time when most social media websites were at the infancy levels. The platform was launched as a means to enable users to follow their interests. Celebrities and big brands were among the first accounts to gain a massive following from users. Within a span of 10 years, Twitter has grown to become a big platform that not only allows users to follow their favorite accounts but also allows them to see what is trending around the world. The trending feature has specifically changed the way people consume information.
Facebook is another major platform that has huge power and influence in various industries. Being a fully-fledged platform where users can upload multiple images, text files, and videos; this platform has changed the way people use information. It has also changed the way brands deliver messages to users. Both Facebook and Twitter are just two of the many social media platforms that exist today. Social networks have enabled people to get information from anywhere in the world on a real-time basis. This is the true power of social media which has the capacity to move markets.
How Social Networks are Influencing Trading
Like stated earlier, social media websites are influencing many industries. The trading markets are particularly shaped by social media in the modern day. But how exactly is social media changing the markets? To start with, traders are benefitting a lot from information that comes from social networks. In contrast to a couple of decades ago, the information streams are no longer limited to newspapers, weekly reports or television news. Instead, there are many sources of information on the internet and platforms like Twitter are among the primary sources of real-time data. Many new traders are also able to learn about topics like forex trading for beginners entirely from social networks. Traders are therefore able to follow important accounts that give them timely updates on the markets and thus enabling them to make timely moves.
It is not just traders who are being affected by social media though. Big companies now face bigger challenges when it comes to managing their reputation. Bad news spread via social media sites about a company has the capacity to destroy the stocks of that company. This effect has particularly been huge in recent times. With shareholders being able to follow information on a real-time basis via social media sites, a little negative report can be enough to take down a whole company. The negative power of social media sites on the market has also been noted from the issue of “fake news”. At such a time when consumers are getting access to unfiltered real-time messages, entities with malicious intent are able to mislead with untrue information.
In the modern day, social media has undoubtedly gained immense power in the markets. Traders and other stakeholders in the markets are left with no choice but to use social media platforms as tools of the trade. The information that comes from social media platforms is not always accurate, however. This is why experienced traders have learned to filter out the misleading information over time. Social media will continue revolutionizing the markets. With more and more people, businesses and other entities getting signed onto these platforms, the social media tools will be an inevitable part of the business. The great amount of data that passes through social media on a daily basis is unrivaled and sufficient to give traders a huge advantage in their daily trade.