By this point in time, most people reading this article have heard about TikTok. For better or worse, the popular Chinese social networking app has amassed a huge following of younger generations.
These younger generations aren’t just 8 year-olds addicted to their parents’ iPads. They are also newly professional, recent college graduates earning a living and looking to invest.
Retail brokers like Charles Schwab added an impressive number of young retailers in 2020. More than half of them were under the age of 41. Many of these young, ambitious traders look to the internet to learn how to profit from their trades.
Traditionally, investors are used to receiving their learning and tips from newsletters and paid subscriptions to curated sources of information. If they’re not lucky enough to have a mentor to guide them.
And sure, many may look down on the idea of learning from a social networking app. But it’s a source of information and many are using it, including this new wave of Millennial and Zellenial (Gen Z) traders.
How much can you trust TikTok for trading
As an app TikTok doesn’t exclusively host traders. Unlike a social trading platform, social media platforms’ objectives are to simply connect people to family, friends, and like-minded strangers.
While a trading community can come from a social media platform, because its main objective is connecting people, there are some limitations in terms of the quality of information that social media offers.
That being said. A wide variety of users on TikTok offer trading tips. From those looking to earn easy money by taking advantage of inexperienced traders to those that are legitimate and look for exposure to make a name for themselves by helping out.
So what happens when young investors begin seeing tips and tricks on social media apps like TikTok?
In TikTok, the best content rules and ‘best’ doesn’t always mean quality. People showing off money, cars, and an impressive lifestyle flood trading-related content in TikTok. Although entertaining, witnessing self-proclaimed trading gurus spend money, shouldn’t be considered educational.
On the other hand, there are also people like Kiersten Crum, whose love of the process and long-term success has them sharing their experience on social media platforms like TikTok and Twitter. Like many others, they were naive when they first began and their content is purposed to help people find their process.
The Caveat Emptor or “Buyer beware” principle applies to getting your trading tips from TikTok, or any social media for that matter. You’re left to choose at your own risk since there is no warranty that the information is legitimate
TikTok hosts many talented people looking for exposure; so, how do you find trustworthy advice?
Well, usually go with your gut. If you feel like you’re being sold something you probably are. There are too many times where you’ll see TikTok video titles promising something like that. “These 3 Stocks are GUARANTEED to go up 10,000%”.
You click on it and the creator rambles on throughout most of the video only to end it by offering a subscription to his weekly stock picks. You might think to yourself “I wouldn’t fall for that”, but you’d be surprised by some of the sales pitches.
There are some other well-intentioned people who offer basic – yet overly emphasized – descriptions of financial concepts. Technical analysis is important for stock picks but you’ll come across videos that make it seem as though it’s a secret tip that no one has previously thought of.
VIDEO: Professional Financial Advisor reacts to TikTok Trading Tips
Despite there being a very interesting offering of educational content on TikTok, young investors must be cautious as to which extent they follow the aforementioned tips.
The TikTok talent in trading
TikTok has given many a chance at virality, that’s why content creators who want to make part of the creator economy prep their best work for a chance to amass a huge following. So in terms of trading content, there are many great, creative, and trustworthy people. To filter who you should listen to, consider the following:
- Are you being sold, or taught something?
- Do they offer content or solutions to problems all they talk about?
- Is their content really helpful? Or are they talking about something that many others already know, but with this month’s trending song?
- Check out their trajectory; anyone who has trustworthy advice for stocks has been in the game for a while, or at least they’re honest about their experience.
All in all, transparency is key, if the creators are realistic about their level of experience and offer real value to you – whether it’s entertainment or education – it’s worth following them. Just make sure that you never feel pressured into buying anything and be skeptical about any offers that seem too good to be true.
The term “valuable content” depends on each person’s connotation. That’s why for the purpose of this article, our selected choice of ‘follow-worthy TikTok account’s are only subjective suggestions.
Ricky Gutierrez (@trading101)
Ricky Gutierrez’s bio reads ‘Hustle to Inspire’. And his account shows just that. As a very transparent trader, he shows his good days and bad days. His main objective is to inspire people who view his content to pursue their hustle.
Ricky is a day trader and real estate investor, he documents his journey and his followers enjoy looking at the process behind his trades. From Sunday night stock picks to live trading sessions his content caters to many.
He has a Learn Plan Profit group, which is paid but besides offering discounts to join he never pushes a sale to join. You can find him on TikTok as @trading101, on Instagram as @rickygutierrezz, and on youtube as Ricky Gutierrez.
Robert Ross @tik.stocks
Robert Ross is a TikTok stock analyst. His content is based on a quick, short technical analysis of market movements with some occasional humorous financial “situations”.
Although some of his humor is parodied by others, they explain basic concepts in an original way. His content caters to new/inexperienced traders, but he offers some useful tips and tools for traders of all experience levels.
Like many others who aspire to get a nice amount of followers, Robert has a Patreon. Those who pay a membership fee have access to view his personal investment portfolio, as well as group chats and more.
Social trading is a form of investing that allows people to copy trading movements from their peers. One of the first and most popularized social trading platforms is eToro which began in 2010. Since then, many other brokers have adapted their own version of a social trading platform in order to accommodate newer younger investors into their business.
Joining social trading platforms is free just like joining social media, so anyone who’s interested in trying them out should create a few accounts and see what they have to offer.
Since social trading platforms are rather new, there are few that have made a name for themselves. Besides eToro’s platform these are some excellent options:
TradeGATEHub is Tradeview’s project for social trading. From live trading sessions to weekly stock picks the TradeGATEHub community gives users the ability to connect with its pros with years of experience.
The TGH community hosts a wide range of industry experts for live interviews continuously (Like the one below with Patrick Karim)
If you would like to join and be part of the TGH community click here.
The European-based fintech company was founded in 2015. Their objective aligns with that of social trading itself which is to decentralize trading technology and market tools for everyone around the world.
One of the neatest features NAGA offers is the constant innovation of its services. From trading education to introducing online gaming items as trading instruments their capability of innovation is amazing.
Trading has come a long way. What once was an activity of the elite is now becoming more and more popularized. Social trading is an amazing revelation of the trading industry, being able to connect with others is only the beginning.
Like social media, social trading platforms will adapt continuously to enhance the trading experience for their users. Each platform will offer distinct and helpful features for its users and only time will tell which platforms will dominate the market.