StockTwits, as its name sort of implies, is basically Twitter for stocks. Lots of short messages with character limits and just like Twitter, StockTwits is often/mostly/usually a total waste of time. Unless you use it in a few specific ways.
You sign up for free, pick the stocks you are interested in following (and the people you want to follow), and then watch as the messages fly by in real time. The more stocks you pick, the faster your feed will spit out the mostly meaningless messages that users post. I’d guess about 95% of those messages are pure drivel. You of course can post your own messages about any stock you like and give your opinion or link out to some source article.
Ignore The Garbage On StockTwits
StockTwits gives a voice to everyone (keep it civil) and because of that you get all sorts of nonsense that should be ignored. When it comes to individual stocks, everyone has an opinion or a gripe. Bullish or bearish, the messages keep appearing on your screen with no end in site. Its a free for all of opinions and “advice” that never ends, even if you want it too.
You can’t use StockTwits for stock advice or recommendations because of the anonymous nature of the platform. Yes, there are real people on there with real profiles and real websites to promote (see my profile here) but there are more users that just sign up for the fun of it and seem to want to have their say. Personally I don’t understand why so many people want to waste time posting messages on StockTwits when there seems to be no gain for them but I guess that is the nature of social media.
Two Good Ways To Use StockTwits
1) The number one reason I sign on to StockTwits every morning and night is to see whats trending. Those are the stocks that are getting the most messages at any one time and that immediately tells me if something is (or might be) going on with any of the stocks I own. The trending is at the top left of the page as shown below:
If one or more of my stocks show up in the “Trending” bar at the top, I know that there might be some significant news about the stock. I can then click on that stock and be taken to the feed where I will sift through all the garbage messages to find the ones that tell me the news of why the stock is trending. I might then opt to go to Yahoo Finance to find out more about the newsworthy event that is causing the stock to trend.
Using StockTwits this way is a great time saver over going into each of my stocks individually in Yahoo Finance to see if there is any important news. Simply taking a peek at the StockTwits trending bar instantly tells me whether I need to do any further research.
2) The second way StockTwits can be useful is by providing links to relevant new stories about your stocks that you might otherwise never see. To find the useful links though, you will undoubtedly have to sift through the many garbage messages to find the good ones.
It can take some time but you can often find some good graphs, charts, and news links on the feeds that provide real information, not just the usual opinionated bullish/bearish sentiments that so many users love to post. I don’t often spend time sifting through the feeds like this unless I am looking for a reason why my stock when up or down and think there is some news that I am missing.
In summary, I believe StockTwits is a huge waste of time UNLESS you use it sparingly and for specific reasons like I do. People love to give opinions on social media and there is certainly no lack of them on StockTwits. The only problem is that most of them are a big waste of your time and you need to find ways to use the platform that will bring real value to the way you invest.