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How to Beat FX Market? Get on Twitter, Academics Say

  • New paper analyzes predictive powers of social media site
  • Mirroring users with 500-plus followers offers big returns
The Twitter Inc., logo is displayed on the facade of the company's headquarters in San Francisco.
Photographer: David Paul Morris/Bloomberg

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.