Tickeron combats gamification of trading as CFTC warns investors

Rick Steves

As financial markets look to adapt to the new trend of social media trading, the industry is making moves to combat the gamification of investing.

The Commodity Futures Trading Commission has warned investors regarding the risks of trading based on tips and rumors on social media for being associated with impulsiveness and lack of research.

The CFTC is “strongly encouraging the public to research and understand the commodity futures markets, physical markets, and securities markets before trading based on information on social media”, the announcement stated.

MPD Acting Director Amanda Olear, commented: “Recent trading activity and market volatility triggered by posts on online message boards and social media platforms have given our Office of Customer Education and Outreach a perfect opportunity to remind investors of possible risks involved when making trading decisions that are impulsive or not thoroughly researched.”

It is widely known that many traders don’t fully understand the differences or risks associated with futures trading or buying physical commodities. The aftermath of negative oil prices in April 2020 is an example.

Regulators in the US have found that posts on online message boards and social media platforms contribute to increased volatility in markets. Many highly leveraged short-term traders have been caught “holding the bag” when prices turn against them in sharp movements.

As financial markets look to adapt to the new trend of social media trading, the industry is making moves to combat the gamification of investing.

Trade signals provider Tickeron has launched an AI-powered platform delivering trading insights and analysis to help users develop new trading skills via a variety of modules and educational courses.

“As presented by current markets, novice traders face two major dangers that result in lost money: the gamification of trading by platforms like Robinhood, and the volatility of the market, as demonstrated recently by GameStop ($GME) and AMC Entertainment ($AMC)”, the firm stated.

Retail traders are joining social trading groups to form alliances and take down Wall Street traders managing high volume positions. This requires quality educational material.

Sergey Savastiouk, CEO and Founder of Tickeron, commented: “We are creating an ecosystem where traders and investors not only receive AI-driven trade signals and information on which trades to make, but also one that teaches them how to interpret the signals on a deeper level and learn about what makes a good trade.”

Combating the gamification of trading is essential to keep retail traders ending up as prey in pump and dump schemes.

While the SEC increasingly supervises trading-related social media activity, many within the industry question whether ‘meme stock’ trading will become a thing rather than just hype. What has been established is that social media platforms can disrupt institutional money.

“We have to recognize that trading will change, said Philippe Ghanem, Executive Chairman of SquaredFinancial. “There is a wave of growing anger, for example, that private traders will not be allowed to invest in a series of high-profile IPOs of companies which are of their generation, like Wise (Transferwise), Darktrace, Deliveroo, and PensionBee. These deals are limited to institutions. These are not gambling, but the traders accused of gambling are excluded. The concern is that when the odds are set in favour of a few, then it is fine. But if the odds are changed the few get upset. ”

“Millennials and GenZs are the traders of the future. They work through different media and in different ways and have power in numbers. Social media allows the instant democratization of information which, if it is correct, can make or break markets. The way the markets have responded is to try and ringfence the past instead of looking at ways to build the future, which is not sustainable.”

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