Antiskilled finfluencers have more influence on retail trading than skilled

Re:Antiskilled finfluencers have more influence on retail tr... by dist-epoch on Wednesday September 06, 2023 @02:09PM (#37408801)

I've spent many years on trading forums and I've noticed an interesting phenomenon. Which makes perfect sense if you think about it:

Bad advice is upvoted, good advice is downvoted.

The reason is simple:

1. 98% of traders on trading forums lose money

2. people generally upvote what confirms their beliefs

Since most forum users lose money, what they will upvote in general is bad advice.

This is why they all believe in stuff like technical analysis, elliot waves, and other bullshit like this, because they see that everybody else upvotes and talks about this. Blind leading the blind.

So maybe the reason these "antiskilled influencers" are more successful, is because they approach trading in the same way as their followers believe is "correct".

[ Parent | on HN ]

Re:Antiskilled finfluencers have more influence on retail tr... by jameshart on Wednesday September 06, 2023 @02:31PM (#37409133)

Now, let’s apply the Gell-Mann amnesia analysis to this insight:

If this is true on trading forums, what other forums is it true on?

Is it true on technology forums? Are 98% of participants in tech forums making bad engineering decisions? Are they upvoting things that confirm their beliefs?

[ Parent | on HN ]

Re:Antiskilled finfluencers have more influence on retail tr... by filoleg on Wednesday September 06, 2023 @03:08PM (#37409658)

> Is it true on technology forums? Are 98% of participants in tech forums making bad engineering decisions? Are they upvoting things that confirm their beliefs?

One of the main differences is that users on technology forums (thinking of something more like HN rather than r/technology or other technology-related subreddits) are typically professionally employed in those fields. So while the advice on tech forums might not be the best, it is usually not asinine or downright moronic.

As for trading forums? Typically they are overwhelmingly filled with people who have never even been employed in finance in any capacity at all, and it definitely shows.

[ Parent | on HN ]

Re:Antiskilled finfluencers have more influence on retail tr... by FerCala on Wednesday September 06, 2023 @03:16PM (#37409796)

This is a pretty good question. I wonder, where else would this apply? Also how does the pareto principle work here? 20% of the people produce 80% of the outcome, so the finfluencers are the 20% that produce 80% of the "advice" on forums and social media, which is based on the feedback that 80% of the people give which is based on their already established beliefs, because the other 20% of the people there are the ones that actually know stuff but aren't big enough to contrarest the 80%.

[ Parent | on HN ]