Anatomy of a Con: How twitter trainers are duping retail (Part 2)
‘Analysis’ ka Nanga Naach
In my last part (read here) I talked about the fascinating journey of con artists that are twitter ‘traders/trainers’ and how they use MTM screenshots to dupe retail/ traders new to the scene. In today’s part I want to talk about another tactic they use a lot — ‘Analysis’ and predictions. Before I begin let me be very clear about the fact that I am not against technical analysis in general or forming a view and taking a trade based either or both. What I have a serious problem with, is these twitter ‘traders/trainers’ who, like the astrologers on television, try to show that they know shit and that they are the shit. Reality is, like the astrologers, they don’t have a fucking clue.
Why is sounding all-knowing and being right about their views so important to these ‘traders/trainers’? That’s an easy one — a. they want to sound knowledgeable so that traders who are new to the scene think these con artists know more than them b. they want to give an impression that it is possible to predict moves fairly accurately c. generally inflated sense of self worth, which usually is the case with confident idiots.
These confident idiots use a lot of buzzwords, draw a lot of lines and use “quant based” analysis, technical analysis, charts based on TA, elliot wave, trend lines, support and resistance, option charts and the list just goes on. Are you impressed by someone who posts a lot of such analysis and you see it working like magic every time you go to their timeline? Look closer. They will be posting tons of charts and then will retweet the hell out of those that actually worked. The ones that didn’t work are buried and you didn’t even get to notice. The image that you carry in your mind is that this person’s analysis is superb.
Here are some of the most commonly found types of ‘analyses’ and predictions that these confident idiots make in order to reel in unsuspecting retail traders to attend their workshops.
Meri Hindsight hai sexy, Meri Analysis bhi sexy
It’s hilarious people spend time and energy to post hindsight analysis. I wonder how it would help to post a chart/analysis in hindsight and say that charts had it coming or it was written all over. The event has happened, how do you expect your followers to get some benefit out of your hindsight analysis. When it comes to hindsight analysis, one handle beats them all and the person is my all time favorite hindsight analyst. I have just one word for him — respect! It took me less than 15 mins to dig out a few tweets of his sharing hindsight analysis — have a look.
Here is the one more hindsight analysis that is extraordinarily dumb. Wipro declared very poor results and the stock was showing a 10% gap down in pre open. The expert comes in with his analysis saying the data was overly bearish but he didn’t tweet about it as the results were due. But alas, Wipro opens only 3.5% lower and in fact closes higher. Abb data kahan gaya bro? You had one job — observe an event and predict it in hindsight. How can one fuck up even hindsight analysis. If only you were not premature in tweeting about it at 9.05 AM and waited for it to at least open, you would have saved yourself some embarrassment there.
These are a special breed of morons. Strategy is simple — predict every possible scenario, no matter what happens the moron thinks he is right. Here is how these usually go and one may call it algorithmic analysis — If A then B, else C else if D and bla bla bla. If bank nifty stays above 23275, target of 24500 is possible, view negated below 23000, a close below 23000 could open the floodgates to 22000. I can’t imagine a scenario where this analysis could possibly go wrong. If you may, then please suggest a bank nifty level which if comes one can say that this person’s analysis went wrong. Here, the expert will make you believe that his analysis was bang on in any case if 24500 or sharp downfall below 23000 happens. Ask a second grade student and he can tell you that 24500 can’t be reached until you reach 23275. When this level of 24500 is actually achieved, then there will be a lot of retweeting, aliens would come on timeline to congratulate about how superb the analysis went. But nobody would care if the index goes below 23000. And if there is a steep downfall below 23000, again they are proven right. Occasionally they will tweet, view negated trade closed. Moreover, there is no timeline given so how one can possibly trade this view. The levels of 24000 or 22000 will be achieved some day for sure but how one trades that is beyond imagination. Here is one such example — See the subjectivity in the tweet and decide for yourself.
Here’s my prediction for the monsoon — Agar to aapko aasman me cup and handle pattern me baadal dikhe, to samajhna barish hone wali hai, aur agar shuru hui to baadh is possible. View negated agar baarish hui hi nahi, us case me akaal pad sakta hai, log marenge, tub me pani bhar ke rakh lo.
Here’s one more — The same expert posted so many tweets on a possible melt up, melt up and melt up. Then confused his own analysis by saying that a bull liquidation or an exhaustion is also possible. One of the two things has to happen right — either the markets will go up or it will go down. Presenting a view that justifies both of these is a sure win-win thing for the expert. Funny bit — An 80 point up move and the expert claims his victory.
Life is unfair / ‘You should quit trading’ defense
There once was a kingdom called Chaat-li-putra and in that kingdom people used to bet their land and crops and money on how many balls of shit came out of a particular goat whenever it took a shit. There was baba who claimed he could predict everything about the goat’s shitting pattern. Because he was super confident and came across as super learned, he had a good following. Was a mini celebrity in the kingdom. One day a hardworking farmer called Retailkishor thought he would also place bets and make big money. And as luck would have it the baba shared his prediction with him and a few others - After doing a deep analysis of the shitting trends I can confidently say it will shit 6+ balls of shit. His followers placed bets for goat shitting more than 6 balls. When the goat finally shat, it only coughed up 4 balls. Retailkishor and other followers lost everything they had and they went to the baba to complain. Baba said - If you were a good goat-shit bet trader you should have changed your bet when the goat started shitting, it was so obvious vats. Life is unfair. You are ignorant and don’t know trading and should stick to farming.
One such baba is Vishvesh Chauhan. Zee business started something called as hero ya zero call. Basically, experts suggest some trades which either would hit target or would go to 0. That’s how hero ya zero call works. One expert gives one such call to buy a CE option of 22400 BN at 50–60 levels for a target of 100/130. I am attaching the chart here and if one was super fast and super lucky, they could have entered at 65–70. Call makes a high of 90 and then trades below 65 within a min. Target isn’t met and expert is blaming it on people that why they should have exited the call at 90.
Hedging ke Baadshaah — In a normal world, hedging helps you to cut down your losses if the view behind a trade goes wrong. But, in the world of Chaat-Li-Putra led by Vishvesh Chahuhan, hedging would not just reduce the losses, but if combined correctly with adjustments, it can turn the losing trade into a big profitable trade. Here the expert was bullish and carried a long delta position overnight. Market gaps down huge and yet the expert claims that he did some sort of adjustments along with proper hedge and miraculously enough all three legs of the option structure got closed profitably.
Another example from a recent entrant to the training world — Someone who attended Options Conclave in 2018 and didn’t know much about options trading himself back then has now become an expert. He posts bullish view for Monday and suggested buying the dips and then doesn’t post a single update during market hours. Post market hours — Maine dips buy nahi kiye the because no matter what I have to look right on Twitter.
The Infamous Infy Live Trade — This part would be incomplete if I didn’t talk about that famous live trade suggested by PR Sundar. Someone with such a huge following suggesting an unlimited risk strategy without realizing the fact there will be so many fools (yes, fools — his words not mine) who would execute the trade without understanding the risk involved. He clearly mentioned in the video, that max loss of 1.6l would be realized only at the expiry and one can keep a certain stop loss and exit the trade along the way with minimal loss. What this does is it creates an impression in the mind of traders that they would get out at minimal loss if things turned south. This casual attitude by the expert without highlighting the proper risk one would undergo by taking this trade is something that dazzles me. Some of the other problems with this trade were —
- Only the initial margin was highlighted and there was no discussion that it would require adjustments and additional margin.
- Started doing adjustments secretively without letting his followers know what adjustments to do. Remember the initial message — One can exit the trade at minimal loss.
- Posted the adjustments only after being heavily trolled but the damage was already done. Moreover, who would have additional 8L margin for a trade that initially required 2L margin.
Main na kehti thi
One thing which is common to all the confident idiots is, you guessed it right, confidence. And in order to fuel this false confidence they will go to any lengths to prove that were right. While everyone does it, the reason I am mentioning this separately is to highlight that all ‘told you so’ statements need to be taken with cynicism. If you find your cynicism was correct for the confident idiot who posts/ tweets such statements a lot — avoid him/her like the plague.
This has to be the most shameless act of ‘Main na kehti thi’. Markets fell relentlessly on budget day and bank nifty corrected 3.5% and closed around 29800 levels. The expert after this relentless fall expected a further 2500–3000 points correction in the bank nifty suggesting it as a large structural breakdown. However the market reversed, the next day bank nifty made a low of 29600 (just 200 points lower) and started going up and touched a high of 31650 within next 9 trading sessions. That’s a whopping 1800 point or a 6% rise. But, the expert didn’t bother to update anything on his analysis or in other words never cared to admit that his analysis went wrong. Comes corona and we all know what happened after that. The day bank nifty comes down to sub 27000 levels comes our expert retweeting his original post and saying ‘Maine bola tha’. For their agenda, they can stoop lower than you can imagine. Hear it out yourself — Here
That’s all folks. Next tadakta bhadakta sansanikhez khulasa on ‘Training Circle Jerk’ :)