There's a question I'm getting asked a lot lately:
"Is there a way to trade Trump's tweets?"
Definitely – it's just not what most investors would expect.
Let me show you…
How to Profit from Trump's Twitter
Love him or hate him, 16.9 million people cannot get enough of "The Donald" on Twitter. Whether that's a good thing or a bad thing is moot.
What matters when it comes to your money is very simple – his comments move markets.
That's why, when it comes to investment input, Trump's tweets are every bit as viable as fundamentals, technicals, or even good old-fashioned headlines. (Remember those?!)
The "why" is pretty simple.
Investors and traders alike need gobs of information to make money. And these days, the faster they get it, the better and more potentially profitable it is.
Back in 2006, traders and investors had to sort through a mere 4 billion messages a day. Today, that figure stands north of a staggering 205 billion emails a day – or roughly 2.4 million emails per second and 74 trillion emails a year. Then you've got to add on another 303 million tweets a day and throw in the traffic from nearly 750 million Facebook users just for good measure. Plus Pinterest, LinkedIn… and… yeesh!
It's no wonder that algorithmic trading now accounts for an estimated 70% or more of total market volume. Humans literally cannot keep up.
The implication, of course, is that computers can. That's what potentially makes Trump so appealing. He's outside the system, both literally and figuratively.
Using social media to identify tweets and trends isn't new. In fact, hedge funds have been working with social data for years. It's simply the tools that have changed.
For example, an analyst may have counted cars in the parking lot outside Wal-Mart in the old days as means of validating the company's earnings projections, or counted the number of people eating at certain restaurants, or even tallied gasoline trucks leaving a refinery to reverse engineer capacity numbers (which I actually did in China a few years back – but that's a story for another time).
These days they're far more likely to use "crawlers" that scrape specific websites for job information, customer testimonials, complaints, FDA filings, and more. A programmer friend of mine was even hired to write code that posted and cancelled tickets on travel websites as a means of figuring out how many seats the airlines have left on a given day.
Creativity obviously counts because anything that is a breakthrough potentially gives you an edge when it comes to finding the next best winner.
And that brings me back to President-elect Donald Trump and why you want to pay attention.
About the Author
Keith Fitz-Gerald has been the Chief Investment Strategist for the Money Morning team since 2007. He's a seasoned market analyst with decades of experience, and a highly accurate track record. Keith regularly travels the world in search of investment opportunities others don't yet see or understand. In addition to heading The Money Map Report, Keith runs High Velocity Profits, which aims to get in, target gains, and get out clean, and he's also the founding editor of Straight Line Profits, a service devoted to revealing the "dark side" of Wall Street... In his weekly Total Wealth, Keith has broken down his 30-plus years of success into three parts: Trends, Risk Assessment, and Tactics – meaning the exact techniques for making money. Sign up is free at totalwealthresearch.com.