The dark side of financial markets — trading, trainings, and thugs
Trading has taken probably its greatest leap post the Covid crash that happened in the stock market in early 2020. What followed the crash was months of lockdown world over and people worked from home for a long time afterwards which meant they had ample time to take to trading. Markets bottomed out quickly following the liquidity pump done by most central banks and it was easy money for the new traders as all they had to do was simply buy and hold. During the same period, there has been a tremendous rise in the options space as well and the options trading has grown exponentially in the last few years (refer chart below).
This has also led to a rise in the number of so-called experts who are willing to “help” retail traders. These self-proclaimed so-called gurus are also known as Finfluencers and while there are different sections for these “gurus” like telegram, twitter, YouTube, etc. but the underlying modus operandi remains the same. I’ll just try to highlight each one of these and it can be seen it’s fairly easy to dupe retailers.
- YouTube Finfluencers — YouTube influencers have grown very large in number in the last 3–4 years, thanks to the low internet cost and its widespread reach. Modus operandi of YouTube is very simple — use clickbait titles to attract views and make outrageous claims. The obvious source of income is the YouTube ad revenues but there are more. YouTube Finfluencers do a lot of paid videos and promote related businesses. Few of these people promoted a crypto currency exchange on their channel recently and later the exchange went bankrupt. People lost their hard-earned money there while the Finfluencers pocketed handsome money promoting the exchange.
- How to make regular consistent income more than your salary trading intraday
- 100% profit in live option strategy
- Buy and sell cryptos easily and earn 12.7% Interest on FDs
- 5 ways to make 1 crore from share market in 2023
If you thought I made up these YouTube titles, oh well you are very innocent. These are the actual titles used by the influencers.
2. Twitter/Instagram Charlatans — When it comes to platforms like Twitter or Insta, the biggest weapon influencers use is MTM screenshots. MTM screenshots are very popular amongst retail and anyone who posts regular profit MTM screenshots gains popularity very quickly. And let me tell you this, it is very easy to create fake screenshots of any platform. On web-based ones, people simply can use ‘inspect element’ and do it in seconds and even for trading terminals like NEST/ODIN, they can be faked easily. Then there are folks who go the extra mile and not just fake the screenshots but fake the whole app or the web version of the broker’s interface. Sounds unbelievable, right!! But that is how it is, people spend a few lakhs so that they can post the videos of their fake positions running with humongous profits only to sell their systems to retail traders.
The screenshot game has changed a lot in the last few years. Not a long ago, these used to be the tune of 10–20k per day and hardly would you see anyone posting an MTM of more than 50k or 1 lac. But the game has changed quickly and how so! These days, if you do not make 10–20 lacs per day, you aren’t even considered a trader. After gaining popularity from these MTM screenshots starts the real agenda behind posting these which is to start some sort of workshop or webinar or a tips advisory.
Let me give you an example. NSE changed the max quantity in a single order of BankNifty options to 900 recently and a so-called big trader who runs paid webinars, telegram tips and a YouTube channel with close to 4 lac subscribers posted a screenshot of his executed orders with one order having a quantity of 1000. Since this was not possible due to NSE restrictions, people questioned it and the trader had to delete his tweet and started blocking everyone he questioned. But it hardly matters, the shop continues to run and without much impact I’d believe.
3. Telegram tipsters and TV analysts — Then comes a section of influencers who run paid advisory through different telegram channels. This happens on business channels also where a lot of analysts share their calls on television. The biggest problem with this is the entry and exit of these calls — it is next to impossible for anyone trading based on these tips to get the fill at the prices mentioned. Reason is most of these tipsters and analysts would suggest a price higher or lower to what is currently being traded (based on if it is a buy or a sell call) and thus it tilts the game in their favor. Revising stop loss, assuming exit before the target, giving hero or zero calls which has very less odds of success is a norm for the people running these advisories. In my opinion, it is next to impossible to make money trading solely based on someone else’s calls or tips. The next biggest problem is the accountability — there’s no track of these trading calls. You go to any business channel, and you will easily get up to a hundred (or more) trading calls but with zero accountability. The trades that work will be shown on loop during the whole day and the ones that don’t will be forgotten.
I keep repeating this — Trading is tough and there are no shortcuts. If you think you can learn trading and start making money just by attending a seminar, following a guru on YouTube or taking tips from a number of telegram groups and business channels, you are far from reality. My humble advice to all the aspiring traders would be to take it slow, give trading the time it requires and see if it is your cup of tea. Treat this as a business and with all the discipline, efforts and luck, you might be able to make it.
Wish you all the best in your journey — Happy trading!!
