Tips & Tip Providers
How tip services work against you: late entries, inflated performance claims and fake registration numbers, and how to check a provider.
Type a search for stock or commodity market tips and there is no shortage of results. But do they work, or are they a hyped ponzi scheme? Here we try to unravel the truth from our experiences and observations. No names are taken, because we are not targeting any individual or firm. We are attacking only the systemic practices followed by advisory services that may be detrimental to you, the viewer or customer.
Market gurus on TV, and other tip providers by phone, SMS or social media, give you entry and exit points for a particular instrument in a particular market. If you have read our post on the Mechanical Trading System, you will understand that they have answered only three of the questions on that list, leaving you to speculate about the other three, which is a sure-shot way of destroying your capital.
A tip provider may sometimes specify a quantity to be traded, but may keep increasing or decreasing the advised trading quantity. That is not a good idea either. Any seasoned trader will tell you that position sizing is one of the most important parts of your trading. If you do not have a solid position-sizing plan, you are already out of the market before you are in. You just do not know it yet, and you will find out when the losses wipe out your trading capital.
If you trade on paid packages, you will have noticed that by the time you enter as per an advice, the price has moved so much that it is close to the target, or has exceeded it. Sometimes the provider advises you to exit before the target is met, but the call arrives so late that the price has already crossed your entry, which means exiting books a loss. There is no use of a tip service if the tip reaches you too slowly to act on profitably. Yet, no matter what happened to you, the provider will list it as a successful trade.
“Sure Shot Calls”, “Jack Pot Calls” and “HNI Calls” are common package names you may have subscribed to. Unless it is god you have taken the service from, no one can give sure-shot or jackpot calls, or any other kind, with 100% accuracy, or near it, consistently over a significant period. If they claim otherwise, ask them to show it to you free of cost.
It is an open secret that many websites offering advisory services carry fake information, including the performance trade list, the profit matrix and even the listed SEBI registration number. Impostors are also not uncommon, contacting you by phone while representing some legitimate SEBI-registered advisor or analyst. An easy check is to ask for their trading history report from the broker, and to see the real SEBI registration certificate. We have never seen a service provider share much beyond accuracy. Maybe they themselves do not know. If they do not know, how is the customer supposed to know? And if you do not know, how on earth are you going to know what to expect from their system, after paying your hard-earned money?
Our founder has personally been duped of funds by fraudsters, in service subscriptions and in trading based on their paid and free services. Those experiences inspire him to work for your financial freedom through this company. If you have read this far, you have done well. You are less likely to lose money trading on paid, or even free, advice.
