Up until now, most companies have mainly used social media for marketing purposes. The new marketing techniques resulting from this have proven to be successful and have allowed many enterprises to considerably cut down on marketing costs. Increasingly, meanwhile, financial institutions have also started to use this platform to predict currency movements. Stock and foreign exchange markets are among the pioneering business niches that are now using the social media platform for predictions in the financial market in a bid of making profits. Previously, predictions on currency movements depended on a lot of research on a professional level – and countless hours of trial and error for amateurs. Even in current times, it takes a lot of practice for one to confidently trade on the financial market. Social media platforms have made the process easier, as one can access sentiments and comments from people around the globe.
How it works
One should first thoroughly study recent comments on social media platforms like Facebook and Twitter to understand and comprehend how people are talking about the financial market. For better results, one should avoid studying only one social media site but at least three. From this study, one then proceeds to create relevant keywords and to include them in one’s profile. After a detailed analysis, one can then create an algorithm that will find indications in the data which will point either to buying or selling. After this, all one has to do is wait for positive results.
What the future holds
A study from University students on how social media can support predictions in currency movements is the core pillar in the development of the Radian 6 for trader’s software, which is meant to help users utilize the sentiments on sites like twitter to make predictions on the stock and foreign exchange markets. The theory has been through countless tests since the release of its underlying academic paper in 2010. This application is meant to serve all individuals and will be available both as a mobile app and browser based service. Developers are optimistic about this application, saying that it will give traders a competitive edge in their trades by closely studying the global sentiment on currency in real-time. When studying and monitoring the social media, the trader is expected to pick the most talked about relevant keywords and use them in his Radian 6 topic profile.
When these premises were tested by the students at Clemson University at first, the outcome gave plenty of reason for hope. After their class test, only 13% of the predictions moved in an unexpected direction – vice verse indicating that predictions were 87% accurate; a highly significant and astounding result. Financial experts have thus realized that there is great potential for business applications and research via social media. As an additional benefit, it is also a great way for business organizations to cut down on the amount they spend on research.
For individual households, meanwhile, these options are still more a fantasy than a reality. Thankfully, there are far less complex and far more affordable ways to deal with currency questions. A currency card, for example, can protect you against disadvantageous currency movement by locking the exchange rate on the card. It may not sound quite as exciting as the Radian 6 software – but it certainly just as effective in practise.
This article was written in association with Tuxedo, a leading service provider in the field of currency cards and a wide range of prepaid solutions. If you like to find out more about Tuxedo, please visit the website: http://www.tuxedoprepaid.com/
About the author: Gavin Whittaker specialises in questions of personal finance and consumer rights in the digital age. He lives and works in London.
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Posted in Social Media Tools and Social Networking. Tags: Radian, social media networking, social media strategies, social media tips
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