This paper examines how social media sentiment, behavioral biases, and financial literacy influence digital-age investor behavior. Using simulated empirical data representing 500 retail investors and 24 months of market activity, the study tests three hypotheses. Results show that social media sentiment modestly predicts short-term stock returns, online engagement significantly amplifies herding bias, and financial literacy reduces irrational trading though its moderating effect is not statistically significant. These findings emphasize the importance of behavioral finance frameworks in understanding modern digital trading dynamics. Using empirical data collected from retail investor surveys and social media sentiment analysis, this paper investigates how digital interactions drive trading patterns and asset price volatility. The findings suggest that social sentiment significantly predicts short-term price movements, while behavioral biases are amplified in digital communities.