Analyzing Twitter for market-moving information has been a business for years. High-frequency trading firms have even built such analysis into their trading strategies.
Then along came @realdonaldtrump.
A month into Donald J. Trump’s presidency, the best algorithmic minds on Wall Street and in Silicon Valley are still scrambling to come to grips with the phenomenon.
“Trump’s tweeting habits seem to be as erratic as everything else about him,” Max Braun, an employee of the Google-affiliated research laboratory known as X, said in a recent interview.
Mr. Braun has built an automated bot — Trump2Cash — that analyzes Mr. Trump’s tweets and then automatically places a trade on the companies the president names.
But like others in his field, Mr. Braun has learned that Mr. Trump’s behavior on social media does not always play out the way the science would predict.
After the president criticized Nordstrom for dropping his daughter’s clothing line, the bot predicted that Mr. Trump’s negative comments about the retailer would cause its stock price to go down, but instead it rose 4.2 percent by the end of the trading day. As of Thursday, however, the bot’s overall returns are in the green, according to a benchmark Mr. Braun is keeping.
The science of trading based on Twitter predates President Trump.
Yet the president “is a volatility machine,” said Joe Gits, the chief executive of Social Market Analytics, which produces automated analysis of social media for professional investors. “He generates more volatility than anything in the