HOW TO BEAT THE FOREX MARKET? JUST GET ON TWITTER, ACADEMICS SAY
BullFax, 10 Apr 2017
By Liam Vaughan Traders need look no further than their Twitter feeds to gain an edge in currency markets, according to a new study by a pair of academics. Buying and selling the euro based on predictions tweeted by currency watchers would give you risk-adjusted returns almost four times bigger than standard carry-trade strategies, Vahid Gholampour and Eric van Wincoop found in a paper published last month. The odds of beating the market are best if you track Twitter users who have at least 500 followers, dubbed “informed agents” in the research because many of them work as brokers, analysts and financial commentators. The findings add to a growing body of literature suggesting market-moving information is circulated on social media before it’s fully reflected in asset prices.
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