Twitter, The Powerful Tool Stock Market Prediction

The Powerful Tool

For most people, chirp on Twitter might just be a tool to express opinions and express themselves. However, the scientists successfully take advantage of Twitter could become a powerful tool to predict the stock market conditions. 

Recently, researchers in the field of social computing from Indiana University-Bloomington, Johan Bollen assisted student named Huina Mao managed to find a correlation atmosphere people on Twitter with the movement of stocks on Wall Street. As a result, they could predict the Dow to a level approaching 90 percent accuracy".

We can achieve 87.6 percent accuracy rate in predicting the increase and decrease the daily closing Dow Jones Industrial Average," said Johan Bollen Physorg.com quoted by the website.

Bollen and his team took samples from 9.7 million tweet posted by 2.7 million Twitter users between March and December 2008. Seeing the mood of a tracking device based on open source named OpenFinder, Bollen sorting through tweets into positive and negative based on words contained in a tweet. 

Then, he uses a standard psychological tool called the Profile of Mood America, which is a short questionnaire commonly used in drug research. this questionnaire to match 72 different adjectives, like 'friendly', 'annoying', active, anxious, or panicky, to respond to the measurement of the atmosphere in six dimensions, namely happiness, goodness, readiness, security, vitality, and tranquility.

After that, they examine the scenes with significant momentum. On the day before the event the United States presidential election of 2008, for example, tweet-tweet Twitter seemed nervous. However, tweet-tweet tend to be more calm, happier, and better on election day. After that, the results compared with the Dow Jones Industrial Average. 

Apparently, one of the emotions, the quiet, surprising match dynamic conditions DJIA stock indices. Bollen not understand why it happened. But quite logical to assume that the mood of the people then also have an impact on some of their investment. In addition, previous researchers also found a way to predict movie box office through a tweet on Twitter.