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If you read about page of this site you will know how much I hate stock market tips providers. They take your money and also give you bad advice. Its a double loss for the subscribers. They pay for the tips and also lose money in the stock market. How bad is that? Have you seen any result-oriented payments subscribers? Every company will take money from you in advance and send you the tips later. Why they don’t do the reverse? Shouldn’t that be the case.
The reason they take money in advance is that they themselves do not believe in their own tips. And I do not think they play the same tips that is given to their subscribers.
In fact I have also lost more than 2 lacks because of these so called stock market experts and tips providers. On top of that I paid them 40,000 over a six month period. That makes it a total loss of Rs. 240,000 – in just SIX months. Can you feel the pain and anger I feel?
I am against and for ever be against these tips providers. If you are reading this and looking for tips providers – please don’t do it. Save this money to do better things in the world. Take your family to a picnic – that will be a better investment that giving your hard earned money to the tips providers. You will not only pay but also lose money using these tips. When you call them when you lose money, they will either not pick up the phone or will come up with thousands of excuses and tell you to keep calm and keep paying for the services. You will in good faith pay only to lose again. You will do it until you run out of patience or money or both.
Once I put a stop loss on these tips providers – I gained confidence and started trading myself. Now slowly I am getting my money back, but at least I am not losing money.
So my advice is, do your own research. Whether its Nifty or any other stock – study about it on the internet or anywhere else. Master in one or two stocks and Nifty. Play in only those underlying which you understand. Play small first, then slowly increase your risk. It will take some time but slowly you will start making money instead of losing it.
Here is another example of tips providers losing money for their subscribers.
A few days back I got an email from one of my newsletter subscribers. I would like to discuss it here.
Here is the email:
I need your advice on the following.
I happened to see a site called xxx.com. They give tips only on the Expiry day.
I was interested from academic point of view the following points:
1. How does they select the strike price?
2. How does they set the targets?
The performance sheet shows the trade was profitable for AUG expiry.
For SEPTEMBER expiry they had selected 5800 call. The trade was successful from 9:40 am but at 3 pm suddenly the premium collapsed.
What must be the reason for sudden fall? The person managing the site says its a freak trade.
Reason of Loss:
We saw Freak Trade [Punching Order Mistake] by Some Big player In 5800 Call And 6000 put.
5800 call Touched 52/- from 115/- And 6000 Put Touched 1.25/- From 100/- , Around 3.10 PM. For 1 Sec. So due to this type of freak trades, our tip did not worked and we did a small loss. So don’t worry our paid clients, we are ready to rock in OCT expiry tip.
My reply was simple:
Over a long period of time you will lose money with tips providers because of
1. Bad tips,
2. You may not be able to trade exactly as they say, &
3. Expiry day trading is dangerous.
Hope that helps,
As you can see when they lost money for their subscribers they gave a lame excuse of “Punching Order Mistake”. According to them the punching mistake did drop the premium for 1 second. But it should be up the very next Right? How on earth they got time to send SMS to close the trade in that one second? One second is like you will not even know what exactly happened. And if the stop-loss order was in the system it cannot be triggered if you have set a limit order. As far as I know its far safe to put a limit order than a market order especially if you are trading on the very risky day. In that case even the stop-order may not have triggered as the value would have jumped way below the stop-loss.
If you are still thinking to subscribe to services of a tip provider. Here is a clue that they are only interested in your money and not making you money. And they themselves are not making as much as they claim.
Lets say these so called tips providers start trading with Rs. 100,000.00 (1 Lac) capital. If you have seen their websites some claim they can give 20% returns every month. Some claim to give even more. In fact I have seen their performance sheets claiming a return of over 100% every month. Read that again – over 100% every month.
If that is really true why are they offering these tips to you at a fraction of cost? Why can’t they play for themselves, compound it and make loads of money in just a few months.
Ok lets assume for a while that these tips providers are correct. One of them trades with Rs. 100,000.00 and generates a 100% return every month. If they reinvest that money every month do you know how much they will be richer in just 1 year? Compounded at 100% return every month they will make Rs. 409,600,000.00 in just 1 year. Let me help you to read that – Rs. 40 Crores, 96 Lacs. If 1 lac was there investment they make an absolute profit of Rs. 40 Crores, 95 Lacs.
After that they need not do anything in life – just enjoy life. A fixed deposit in a bank with a guaranteed return of 8% a year will fetch them 442,368,000.00. Lets calculate the profits: 442,368,000.00 – 409,600,000.00 = 32,768,000 / 12 = 2,730,666.66. They will make Rs. 27 Lacs, 30 Thousand every month without raising a finger. Imagine the kind of life they can have after just one year. Now think for a second if they are really that good – why should they employ people to take a few thousand rupees from you? They should keep their talents a close secret, make money and enjoy that money.
Even at 20% per month Rs. 1 lac will grow to Rs. 45,435,424.00 in 5 years. That is Rs. 4 Crores, 54 Lacs, 35 Thousand and 424. It is still good money to live a comfortable life. Why should they be bothered about your money.
Bottom-line is people who are not confident about their own research and have nothing else to do in life get into the business of stock market tip providing services. Its a easy business. If they reach 100 people and 5 people convert at Rs. 6000 per month. That is Rs. 30,000.00 per month. Considering their advertising, SMS and office expenditure is Rs. 10,000 – they make a profit of Rs. 20,000.00 per month every 100 people advertised. Now imagine some tip provider reaching thousands of people looking for their services every day. Using the internet and newspapers this is easily possible.
Hope you get the point. Now let me tell you some secret. They do something else and tell you to do something else. They never play naked. They will always hedge their positions so that if they lose money in one position they get back from some other. This is what they never tell you. If they were so confident, they don’t need a company called so and so tip providing service. Unfortunately still these companies exist and make more money from their subscribers than what they themselves make from the stock market.
Sometimes I think most of them do not trade the stock market at all. They live a comfortable life on their subscribers money.
If this article can stop even one person from not paying these tips providers, I will feel that my time was not wasted and this article was successful.
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