StockTwits Review – Is It Worth The Time?

About StockTwits

StockTwits was launched in 2008 by Howard Lindzon as a platform for traders and investors to share ideas. The platform is responsible for popularizing the cashtag (i.e. $AAPL) that we all know and love today. The site is home to over one million members who share trading and investing ideas in real-time.

StockTwits is completely free to use, but like any investing tool, it still needs to provide valuable information in order to be worth using. A free tool that loses you money is a worse value than a paid tool that makes you money.

So, is StocksTwits worth using? Keep reading our StockTwits review to find out.

StockTwits Platform

The StockTwits platform will feel familiar right away. You can think of this platform as a fusion between stock market message boards and Twitter. Traders can share charts, links, and short messages about different stocks. These ideas are then aggregated into streams for each individual stock.

You can access StockTwits from your computer or you can download the StockTwits app to access the social media platform on your phone. Both the web version and StockTwits app offer similar functionality (just like Twitter).

The most innovative part of the StockTwits platform is the cashtag, allowing users to tag tickers in real-time. Unlike clunky message boards, the system was simple and well-organized. Eventually, Twitter adapted the cashtag in 2012 making it easier for traders to use Twitter to share trading ideas. So, is the StockTwits platform outdated?

Yes and no. While you can use the basic cashtag functionality on Twitter, StockTwits is much more organized and “trader friendly.” It is a trading community that includes active traders, stock market investors, and other market participants.

Let’s dive into some of the features.

Streams

StockTwits provides streams of real-time messages that can be organized by a specific ticker or a general theme. For example, streams can be organized by:

• Suggested
• Trending
• Charts
• Equities
• Forex
• Futures
• Private Companies

Themed streams (such as trending) can be helpful for idea generation and the streams can be viewed in the browser or popped out as their own windows.

The streams of specific stocks also provide some valuable aggregate data in the sidebar. Traders can track message volume and market sentiment over time.

The stream itself is pretty simple. You can share ideas and sort through messages. This whole section feels a lot like Twitter, where you can sort messages by popularity or recency and isolate media posts. Overall, it’s simple and easy to use

The quality of the streams comes down to the actual messages posted (which we will get to later).

Heat Maps

StockTwits does a great job of aggregating data and creating visual representations through heat maps.

The heat maps can be used to gauge the performance of market sectors and find winners and losers within each sector.

StockTwits also has a section for top stocks. This can be considered the “trending” section as it shows stocks with increased (or decreased) levels of social activity.

You can choose to view trending stocks, most active stocks (based on message volume), and most-watched stocks (based on 24-hour volume of new watchers).

These rankings are actually one of my favorite StockTwits tools. You can use the lists to generate some solid trade ideas. StockTwits acts as a social media scanner of sorts, allowing you to find stocks that are widely discussed. While social media interest alone isn’t a reason to trade a stock, these lists serve as a good starting point for day traders and swing traders who want to discover trending stocks.

Value of Aggregate Social Data

As mentioned above, StockTwits acts like a “social scanner,” helping you find stocks based on social activity. In fact I used to use the “StockTwits Social Media Mentions” filter as one of the hits for my scans in ETRADE Pro (before Etrade remove the scanner from the platform). Seeing all of this social data in one place can help you generate better trade ideas.

In this day and age, social media can have a big impact on the stock market. We’ve seen stocks move from social media hype alone. When traders exchange ideas on Twitter, Reddit, and StockTwits, they attract new traders to the stocks they are watching. Interest grows, and volume hits the market. Diligent traders should be paying attention to the source of this volume (i.e. social media).

The Social Component

Now that we’ve discussed some of the core features of the StockTwits app and social media platform, let’s discuss its viability as a trading tool.

At its core, StockTwits is a social network designed specifically for traders. It is an investing community (or trading community, depending on how you use it).

Traders can follow each other, share/like/repost messages, and more. Unlike Twitter, this community is designed specifically for traders and it shows. Traders can add watch lists, tag their messages as bullish or bearish, and utilize a variety of convenient features.

That said, StockTwits is a free community where traders can post whatever they want (similar to InvestorsHub). For that reason, you run into three main issues:

1. Self-Promotion
2. Credibility
3. Noise

As part of our StockTwits review, we did a deep dive on a lot of the message streams (as this is the main feature of the site). Here’s what we found.

Self Promotion

StockTwits is a large community of traders and investors, making it a goldmine for marketers looking to reach a niche audience. I have absolutely no issue with the in-stream ads; I know StockTwits needs to make money somehow.

That said, there are many news sites and trading services that tag tickers and simply link to their own site in hopes of gaining exposure. This kind of promotion adds very little value and muddies up the streams. Just look at how many posts a single company in the niche has posted since joining in April of 2016:

While it’s impossible to avoid this issue completely, it would be nice to see StockTwits crack down on it a bit more.

Credibility

The second major issue with StockTwits is the inability to determine the credibility of the users. In the world of finance, credibility is everything. For example, a stock tip from Warren Buffett is far more valuable than a stock tip from the clerk at the gas station. The only way to differentiate between actionable information and noise is to consider the source.

The only metric that can be used to gauge the credibility of users in StockTwits is the follower count, which is definitely not the strongest indicator. For the most part, assessing credibility on StockTwits is the same as assessing credibility on Twitter. StockTwits does have a list of official accounts, but many of these are brands, and most messages in the ticker streams do not come from these accounts (from my experience).

It’s difficult to offer a solution to this problem, but I do like how TradingView assigns a reputation score to its users.

At the end of the day, StockTwits members should remember that social media platforms are not the best places to receive investment advice.

Noise

If you’ve been trading for some time, you’ve probably been on at least one message board. The Yahoo Finance boards were popular back in the day and InvestorsHub remains popular for penny stock traders. The concept of financial message boards sounds great in theory but rarely works in practice. Simply put, there’s very little room for constructive conversations. Instead, these boards are littered with pumpers and bashers.

StockTwits faces the same problem. Messages like the ones below (which are common on most streams) hold little value.

The streams are far too noisy to be as valuable as they could be for active traders or those looking to do research.

Once again, it is hard to combat this issue on social networks, but the ability to filter messages based on the credibility of a user would be nice.

It should also be noted that StockTwits is home to a broad range of investors and traders. There are long-term investors, experienced traders, amateur traders/investors, and so on. While this diversity can lead to some great conversations, it can also lead to confusion. Timeframe is a consideration for any well-planned trade, and traders and investors have different timeframes. For example, a short-term day trader could be bearish on $AAPL while a long-term investor could be bullish. Both analyses could be right, but the conversation can get confusing when simply scrolling through message streams.

Is StockTwits Worth the Time?

So, what’s the verdict of our StockTwits review?

Overall, StockTwits is still a quality website. The reason for mentioning the critiques is because I think the site could be 10x more valuable with some tweaks. Currently, I would define StockTwits as more of a social network than a trading tool. If you’re looking for actionable trading information without the noise, you should consider joining a trading chat room.

That said, StockTwits delivers a lot of value by aggregating message data into actionable insights. For example, reading 50 bullish ideas on a single ticker doesn’t add much value but knowing that 95% of the messages about that ticker are bullish can be an actionable insight.

Overall, I like StockTwits for two main reasons:

1. Idea Generation
2. Entertainment and Basic Research

As mentioned above, the aggregate data is great for idea generation.

The site can also be used as an entertaining financial social network. It can be interesting to scroll through streams and see the different ideas surrounding a stock. There is also some valuable information embedded in the streams, but there is far too much noise to make this a “go-to” research tool.

Pros

• Heat maps and aggregate social data are great for idea generation
• Market Sentiment feature is insightful
• Platform is well-organized and easy to use

Cons

• Streams can be noisey
• There is no credibility metric for users
• If you already use Twitter for trading, StockTwits won’t deliver too much additional value