Are you amongst people who keep searching for “Stock trading Tips” on google? Then you must read this:
In this post I want to highlight important point – why most traders lose money in stock market..!!
And why reckless & ill-informed trading should be TOTALLY avoided..!!
Ignorance is a dangerous word when it comes to stock trading and investing.
Every other day, I (like many others) get spam calls/SMSes from some Advisory service providers asking me to join their stock trading tips & advisory services. Ever wondered how come so many tips providing firms come up?
Ever thought why these advisory firms keep calling people from morning to evening (even during the market hours). Instead of using their expertise to trade for themselves and make money.
And What they claim: “Make Rs.3 lac on capital of Rs.1 lac”. “Make Rs.5 lac on capital of Rs.2 lacs”. “100% profitable calls”. “Free Trial for 3-5 days”.
Let’s understand how it’s easy to start such stock trading tips services with very little knowledge. Also let’s know how they impress people with their 100% sure-shot calls in Free Trial. And once people subscribe to them, they see big losses in their trading capital within 15-30 days.
Let’s understand the basic funda behind stock trading tips 100% Accuracy in free trials which people fall prey to.
They begin by calling/SMSing as many people as possible asking them to register for free trials. (They buy email and mobile number database of Demat account holders).
Now suppose they got 80 trial subscribers.
They will divide this into 2 groups of 40-40.
To first group of 40 – they send BUY call & to other 40 they send – SELL Call for same stock/index.
Now 1 of the call will work and 40 people will get successful call. Ignore the other 40.
Next day, they divide this 40 people (who got successful call) into group of 20-20.
To first group of 20 – they send BUY Call and to other 20 they send SELL Call.
Again 1 of the group will get successful call. So after 2 days of free trial at least 20 people got sure shot 100% profit calls.
On 3rd day, they further divide the 20 people who got successful call, into group of 10-10.
To first group of 10 – they send BUY Call and to other 10 they send SELL call.
Again 1 of the group will get successful call.
So now there are at least 10 people who got 3 days of “100% sure shot call”. They are more likely to pay the fees and join the subscription services in greed of getting such profitable calls every day.
The subscription services range from Rs.5000-30000/month. This is how such stock trading tips & Advisory firm’s make money without any research or knowledge of stock market.
Also the people who got unsuccessful calls will again in few days get call from some other Advisory service for yet another set of “Free Calls”. These people usually work from 3-4 different firm & website names)
(Disclaimer: Not all Advisory services are frauds, there are some genuine SEBI registered stock advisory firms. They give Advisory services based on proper research and technical knowledge).
Almost 70% people who register for our online course are those who have suffered losses in stock market. Now want to recover their money.
I get lot of such messages.
What I observed is that as soon as people open a Demat account they think they are ready to start trading. They almost immediately start trading on recommendations from stock trading tips providers.
Such trading tips providers ask people to start with Rs. 1 lac-2 lac capital. They make promise of handsome returns every month if you blindly trade on their tips.
This is how process of losing the capital starts!
Why are people ready to risk such large amount of capital on stock trading tips providers?
If these so-called daily stock trading tips providers have strategy/techniques to trade on capital of Rs.1-2 lacs. Then their techniques should also work on capital of Rs. 20000.
People go to “Stock trading tips providers” and convert Rs.2 lac to Rs. 20000 instead of converting their Rs. 20000 to 2 lacs.
Better to invest time and money in “learning proper skills” than to waste money on trading tips. Such tips providers will eventually make you lose your hard earned money.
One must have own trading plan, own trade management rules. The rules that are aligned with own personal goals and risk profile.
“Go for Learning Skills to trade – Not Tips to trade”.
You need to develop a trust and belief in your trading strategy before you can pour in more money for trading.
My straight suggestion to people who are NOT making profit of at least Rs. 20000 per month (i.e NOT adding 20,000 to their initial trading capital) – they should CHANGE their Trading strategy/plan OR completely STOP trading. It’s not worth wasting time & money on Trading.
Rs.20000 per month means Rs.1000 per day on an average (considering 20-22 trading sessions per month).
With a proper trading strategy even on capital of Rs. 5000, one can make Rs.400-500 /day by trading in multiple commodities like Copper, Aluminium, Crude Oil, Nickel etc. [ Read here how to easily trade 9 commodities on MCX]
Remember Stock market is not the place where money is created. Here money is only transferred from one person’s Demat account to another person’s Demat account.
In other words money is transferred from reckless/ill-informed/unskilled trader’s pocket to a smart/disciplined/well-informed/skilled trader’s pocket.
The reason why 95% of retail traders lose money to 5% disciplined/skilled traders – they totally depend on recommendations/advice of others for trades. They are not able to take independent decisions about managing trades.
There is no harm in taking advisory from others, but one needs to have own trading plan. Ans a proper trade management system which aligns with personal goals.
Your trading strategy/plan doesn’t have to be confusing.
It doesn’t have to be complicated.
If you CAN’T write your trading strategy/plan on a single visiting card, then it’s too complicated to use.
Techniques & strategies should be such that it can work in any market condition.
When people send me messages where they are able to take own trading decisions and benefit out of it I feel very happy.
These were 2 contrasting messages which I received this week.
One is where a person lost large capital trading on tips from others. And 2ndmessage where a person made money on his own trading decisions.
Which one is better?
We are living in times where flow of information happens in matter of micro-seconds. You don’t even need to move from your place to learn trading techniques. You can learn simple, high- impact techniques & skills right from comfort of your home, wherever you are.
We have people who have registered for our eLearning program from UAE, Australia, USA & Sweden.
If a person can operate a mobile phone then s/he can very well learn these skill-sets to trade on own. That’s how we have simplified the entire stock & commodity market trading for everyone.
With our online course, even a 10th grade student can learn – how to trade on own.
To simply put – “If you want to succeed in stock market, first invest good amount of time on learning.”
Please share your thoughts in the comment section below.