Anatomy of a Con: How twitter trainers are duping retail (Part 1)
MTM Screenshots
After my last blog on how some twitter ‘trainers’ were conning traders who were relatively new to the scene, I have been meaning to write about some of the tactics these people use to bait and reel their ‘marks’ in. TLDR for those who missed my earlier blog (Link) — I got conned myself by these ‘trainers’. Shelled out 50K for one such training workshop to get strategies which I painstakingly back tested to find that they didn’t work. Since then, I have found myself observing these ‘traders/trainers’ very closely. Not just to answer the question — How could I fall for this? But to also understand and shine the light on some of the tactics they use on their prey. It is absolutely astonishing how easy it is for these people to dupe retail — there is a set pattern to this con journey and if you observe them closely enough you will be able to spot which part of the journey a particular ‘trainer’ is in. One more crucial thing that I have observed since I wrote the last blog is the speed at which these ‘trainer’ journeys are shortened these days — would you believe me if I told you that there are ‘trainers’ who are charging upwards of 20K per person for webinar and they were learning/attending workshops themselves not 6 month prior to starting their own shop! The journey is fairly simple:
Step 1: Learn Basics — Need to at least look and sound intelligent when talking technical and posting charts. Confidence Level: Meek
Step 2: Start Engaging on Twitter — Post ‘Calls’, ‘Expert’ Analysis, Charts with ‘trend lines’ and general engagement with other traders & ‘trainers’ on twitter to make friends or enemies and start building a base. Endorse their own ‘trainers’/’gurus’ and thank everyone and their mothers for existing. Confidence Level: Humble Servant
Step 3: Be endorsed & do free ‘workshops — Become ‘friends’ with a few traders — be a part of a gang. Become part of Eagle gang vs Bicchhu gang fights on twitter. Get RTs and endorsements on analysis, calls, views etc. from others including their ‘gurus’. Conduct free workshops, ostensibly to help others out to this difficult world of trading. Confidence Level: Cocky, with a side of eagerness to show the light
Step 4: Paid workshop — Cha ching! This is what it was all about. The ROI to this journey. Opinions and views are not harder. Analysis is now never wrong. Expect everyone and their mothers to be grateful they post and take workshops. Confidence level: Godlike
Step 5: Become an expert/guru — If step 4 is repeated enough number of times and the shop has been set and running well, then they reach the zenith of their ‘training’ careers. They are now ‘experts’ and ‘gurus’ themselves. They do not bother with disagreements or disgruntled workshop attendees, because they are beyond all of that (and the fact that their training dukaan is running well). Keep followers engaged, keep giving generic gyaan, start telegram channels, keep posting winning MTM screenshots, calls, analysis and keep taking workshops. Confidence level: Humble God.
No matter which part of the journey a particular ‘trainer’ falls in, there are certain tactics which are common to all and what I am trying to do with this series of blog posts is to tackle one such topic at a time with live examples. To start the series off, I thought I should write about the most common yet effective tool in their tool-box — MTM Screenshots.
If there is one thing you can be certain about is that every single twitter trader would make money everyday. I see a lot of MTM screenshots on my timeline where people make lakhs of rupees on any given day. What we hardly get to know is whether the trading method was systematic or discretionary, how much was the capital that they traded with, how much was the leverage taken, what was the risk appetite, what were the methods they traded, how much has been the max drawdown trading those methods, how does the equity curve look like. Without all this information, a profit screenshot of 1 lakh or 1 Cr is useless. If my trading capital is 10 Cr and I post a screenshot of 1lac on a given day, that’s just .1% ROC. At the same time if my trading capital is 10l and I post a 1lac profit that’s an insane 10% ROC in a day but even then it doesn’t tell me that on a losing day how much money am I losing everyday. In fact, people hardly lose money on twitter, even if they are posting loss screenshots, it will be very rare and the average profit on winning days will be much higher than the average loss on losing days. To be profitable, you only need to have one of two things in your favor to have an edge — either risk/reward or winning accuracy. But, twitter traders have both these parameters so much so in their favor that it looks too good to be true.
Here is an example of one such trader posting MTM screenshots -
Just look at average profit vs average loss and the number of winning days vs losing days and decide for yourself. I picked up the last 15 days and here are the mind-boggling stats for you -
Winning days — 10
Losing Days — 5
Gross Profit — 16L+
Gross Loss — 2L
Net Profit — 14L
And the trader had 11 more winning days streak just prior to this. If I ever get such a trading system/instinct/hunch, I am never ever going on twitter launching my webinar and disclosing my trading system to them for a meagre fee of 7k per participant. Moreover, when the participants want to check whether the trader is as good as he claims by asking them for ITR/Ledger, they get blocked instantly. There are many instances where the trader has blocked people who tried to engage in a logical conversation or asked for ITR/ledger for the last few years. Why would such a successful trader do that, I leave it for you to think about.
Here is one more for you — Someone who has managed to get a monthly profit of ~2 crores on a 9 crore capital i.e. a staggering 20% monthly returns (Yeah read it again, it’s not 2 lacs it’s 2 crores) still wants to give away the most profitable trading setups for intraday and positional for a throwaway price of 10k per participant. Surely, the guy doesn’t know how to make proper use of a gold-mine.
In case you are still not convinced that generating MTM screenshots is no joke, please go through the below screenshots from a twitter thread by @passivefool (referencing here with permission). You can fill your day with loads of MTM screenshots and a lot of positivity that money making is so easy.
Jim Simmons, who?
Just to be clear — I have nothing personal against or for any of these ‘traders’ or trading style. I am using these examples because I spotted these. There might be hundreds of more traders who are trying to dupe you or are helpful and that will have to be a judgement call by you. All I am telling you is how to spot baits/tactics used by these people basis my experience & observations. On the point of posting MTM screenshots itself, people say that posting MTM screenshots will inspire aspiring traders that money making is possible in trading. According to me, it might do the exact opposite — it might create a false impression in the minds of aspiring traders that trading is cake walk while on the contrary it’s not easy making a living trading. While you go through a rigorous education/practice to excel in any other field, how do you expect to become a professional profitable trader in the matter of a few weeks/months or after attending any number of webinars/workshops? Any strategy/system/setup is just one piece of the puzzle, there is whole lot more that goes into to be a successful trader. So, all I would say is don’t get mesmerized by the MTM screenshots that you see on Twitter, there are far better ways to get inspired.
All I am trying to convey is that if you feel that you must attend someone’s workshop based on their MTM screenshots and the profits they make everyday, you should consider asking them for proof whether they are successful in first place or not? Or are they providing live calls that can be tracked easily (a min of 50 trades) — not just random charts, observation and posting generic gyan based on levels.
If you are thinking to pay for anyone’s workshop, remember you are the customer and you have every right to ask for credibility. If they can’t provide it, better to use that money to buy sanitizers and face mask.
To be contd: Next bit on ‘Analysis’ Ka Nanga Naach
