Trading Chat Rooms Explained

The life of a trader can be lonely. Everything, including trading, is so much easier and more fun when you are part of a community. Joining a trading chat room can have several benefits, especially for novice traders.

Trading chats and investor groups are online communities on social media platforms like Reddit, Twitter and Facebook, where retail traders exchange information about investing strategies, trading ideas, securities and brokers, and discuss the latest news. These chats and groups usually offer educational tools, training sessions, courses as well as alerts and watchlists. Some of these forums are free, but most chatrooms charge a membership fee to prevent trolls from joining. Some also use moderators to oversee the conversation and make sure members treat each other with respect. 

You have to be careful when joining a trading chat room, because bad ideas spread fast, and not all forums and chats are safe. Investors should be skeptical of stock advice and tips provided in chat rooms, and should do their own research before acting on these tips, warns the US Financial Industry Regulatory Authority (FINRA). In internet chatrooms, it is very easy (and also very cheap) to share false or misleading rumors and information that could influence the market or could be considered manipulative.

Trading rooms on social media
Trading rooms and investors' groups on social media

A wide range of trading chatrooms, forums, investment groups and even private stock clubs exist on social media for both novice and experienced traders. Some of them are little more than real-time chats, while others, including Investors Underground, Warrior Trading and Trade Ideas, are more sophisticated and structured platforms.

Now let's take a closer look at the protagonists of the GameStop story.

WallStreetBets on Reddit

This is the chatroom where the whole stock-buying frenzy started, first with GameStop, followed by AMC Entertainment Holding, Nokia, Bed Bath & Beyond and others.

What is WallStreetBets? This is how they define themselves: 

like 4chan found a Bloomberg Terminal

/r/wallstreetbets is a community for making money and being amused while doing it. Or, realistically, a place to come and upvote memes when your portfolio is down.

The investment group, created in 2012, is a subreddit channel with almost 8 million users that satirically call themselves ”degenerates” or “autists”. They mainly target heavily-shorted companies by fuelling dramatic price increases, which in turn force short sellers to buy back the shares. This can lead to a short squeeze

WSB even has a content guide. According to the rules, no market manipulation is allowed:

"Don’t post for the purpose of instigating or coordinating a group buying effort to move the market for a security. For example, posting to encourage others to buy call options so that market makers will be forced to delta hedge their short positions. Similarly, any post that contains false or misleading information and is made for the purpose of manipulating the market for a security is prohibited. Any activity of this sort is against the securities laws and will not be tolerated on this forum."

The group has a Twitter handle wallstreetbets mods @wsbmod.

Robinhood Stock Traders group on Facebook

The Robinhood Stock Traders group made the headlines after Facebook temporariliy disabled it on January 29, 2021, saying that they violated policies on adult sexual exploitation. A Facebook spokesperson, Kristen Morea, told Reuters: "This group was removed for violating our Community Standards, unrelated to the ongoing stock frenzy."

Founder Allan Tran posted this in all caps in reply to Facebook's move:

"THE MAJOR INSTITUTIONS ARE ATTEMPTING TO SILENCE OUR COMMUNITY. WE ARE POSITIVELY IMPACTING PEOPLES LIVES AND THEY ARE ATTACKING OUR GROUP BECAUSE WE ARE MORE POWERRFUL THAN THEM. 
WE HAD ALMOST 200,000 TRADERS IN OUR COMMUNITY WHO COULD KICK BUTT TOGETHER. AND NOW ITS DELETED 
THE MARKET HAS SHOWN TIME AND TIME AGAIN THAT THERE IS POWER IN MASSES"

Tran has already set up another group on Facebook called Robinhood Traders. 

"We are a community of stock traders that primarily utilize the brokerage Robinhood! All posts within this community should not be taken as financial advice, nor be a signal to buy or sell a position! This community is built for education, conversation and general positive vibes."

However, group members asked Tran in the comments to remove “Robinhood” from the name of the group, apparently feeling betrayed after Robinhood limited traders buying GameStop and other stocks. Many traders said they were abandoning Robinhood following the incident.

Tran has a free trading community on chat app Discord as well.

Author of this article

Gabriella Lovas

Author of this article

Gabi loves writing new content, be it a broker review, an article on investing or a blog post. She enjoys every step of the writing process, from doing the research to editing. Working remotely from Barcelona as a content editor is both exciting and challenging for her.

Gabriella Lovas

Content Editor

Gabi loves writing new content, be it a broker review, an article on investing or a blog post. She enjoys every step of the writing process, from doing the research to editing. Working remotely from Barcelona as a content editor is both exciting and challenging for her.

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