Stock trading is indeed a messy business - no denying that fact, and it's entirely a game of probabilities. No technical indicator, theory, or expert can guarantee 100% success. But prudent trading practices, rational decision making, process-oriented approach with a mix of patience and risk management can make it a very profitable activity that can generate consistent returns.
In this multipart series, we will highlight the typical behaviors of bogus market experts. Feel free to post your suggestions in the comment section and provide us with tell-tale signs of bogus gurus to be covered in the next update.
- Day trading - of all trading strategies, day trading happens to be the riskiest with the least rewarding potential. Trending markets may create an opportunity to make a quick buck. In a professional sense, day trading never makes enough gains to justify its risk. From Warren Buffet to Jeff Bezos, no billionaire ever made it big from day trade. While it may look good in theory to multiply gains rapidly by taking advantage of daily highs and lows. In practice, an intraday move of the stock is random with poor predictablity.
- Social media - a successful trader needs a lot of time, energy, and focus to do their work. While some social media presence and showing off success are rational, it cannot be an obsession. Stock traders are judged on their failures, not on their success. Everyone can have enough success ratio to stay in net profit, but the frequency of failures determines the sustainability of that success. For someone to be on every possible social media outlet and spam it like a full-time business is a hint of having too much spare time and too little to do.
- Paid consultancy - successful traders do not depend on upfront fees, they get paid on their results. To have a guaranteed revenue regardless of a client benefit in an investment deal borderlines on unethical practice.
- YouTube - often seen begging their audience to subscribe to their YouTube channels in hopes of creating advertising revenue. Those who cannot make it in trading resort to advertisement laden YT channel and selling books. A good product sells itself, it does not need begging! EDIT: Jan.08.2021: There is a similar infestation of gurus peddling their advertising-laden Andriod Apps which is another way to generate revenue. Sometimes these Apps are not listed on official stores and peddled through file sharing links. Which makes them risky and can compromise your data privacy.
- Course gurus - relatively a new phenomenon that has popped up in the age of social media learning. Courses are often marketed with an overload of marketing jargon promising quick returns and expertise parallel to no other. Stock trading is a long term process needing commitment, practice, and real capital. Trading strategy has to be tailored around individual personality and psychology while individual temperament carries a strong influence. There is no shortcut to knowledge or success. A short course may get a person started, it will never make them a professional. It may be a good idea to learn from a professional but a successful trader should make enough from their own trading and do not need to sell courses.
- Lower time-frames - the lower the time higher the volatility and the higher volatility makes it difficult to predict. A difficult to predict trade is difficult to profit from. Inducement into risky trades is not worth it even if it causes no capital loss because it freezes valuable capital into non-performing trades. Experts always determine markets on a closing basis which is an established industry standard. Again, an intra-day move is typically random.
- Stop-Loss - while rational risk management is a good practice and stop-loss will get you out of a messy situation. Its application is limited and cannot be a cure-all for all situations. The same applies to position sizing. Diversity is necessary for prudent risk management but it actually comes down to trading practice, experience, and opportunity. These experts dubbed "stop-loss gurus" specialize in offering reckless trade with stops and then taking credit for hitting their stops. Hitting a stop in loss is not a matter of pride, rather it's a failure.
- Penny stocks - no self-respecting expert wants to go into this territory. Penny stocks happen to be a non-performer over a long period of time and come with a huge downside risk. Getting lucky in them has the same probability as gambling. Trading in fundamentally poor stocks or those with little strategic value is simply a waste of time and money.
- Chasing breakouts - literally expecting too much out of too little. This is a greedy approach to trade with a random success ratio. Breakouts always have a risk of failure or even collapse. Greed kills!
- Tip-Chor - there is a special salute of disrespect for this breed of gurus. Such that not a word in an English dictionary exists for them. They are present in every instant messaging avenue, often with multiple or false identities, and simply help themselves with other's work to make an "honest" living. Sometimes they do not even have a trading account of their own!
nicely explained. too many fake experts out there. keep the good work going master.ReplyDelete
Indeed, these 10 well explained points would be enough for investors to get rid of fake paid gurus.Delete
Master good one very appreciatedReplyDelete
Ohhh great Master. Geniunely You are full of knowledge. Its really helps us by reading your views, analysis and comments on any specified topic related to trading.ReplyDelete
May ALLAH give you good health. Ameen
Greatly explained. Will share my experience in detailReplyDelete
Welcome. You can email me also at firstname.lastname@example.orgDelete
Good points will eagerly waiting for part 2ReplyDelete
Sir u open the eyes of general publicReplyDelete
Can you please guide how much investment is sufficient to make an average monthly earnings of 50kReplyDelete
Stock market does not work on monthly it runs in cycles. If you need monthly returns better to go into national savings!Delete
Great work and good overview of what is being witnessed in every bull cycleReplyDelete
Very valuable and mind changing write up. Learnt a lot. ThanksReplyDelete
Great work master. Another obvious sign is how the gurus hibernate themselves in bearish marketReplyDelete
It will be covered in the next updateDelete
Awesome! Each and every topic covered in an exquisite manner!ReplyDelete
Thanks for the write-up. Although new to this trade seeing these people around very often now.ReplyDelete
salute of disrespect for tip chor ... i loved this sentenceReplyDelete
Above Explaination tells us that stock market is not a casino..learn like a proffessional..Do ur home work before trade ...ReplyDelete
More over most expressive way of knowledge
I like the way how you covered all types of gurus and i saw in a group that gurus are using lower time frame and showing breakout to grab attention towards them and most of the youtube gurus are just telling review of market and thumbnail showing technicals of market when you run the video there is nothing to learn technicalReplyDelete
I learn lot from you from your whatsapp group to till now in Telegram group
I must say well described. Crazy as it gets, these gurus are everywhere. Well done master.ReplyDelete
Like i have always said, you're a genius. So far all your advices have been very sincere without any hint of greed or fraud, respect to you sir! Also, tip chors will be crying after reading this blog. LolReplyDelete
Very good stockmaster keep continue for expose bogus gurus..ReplyDelete
Master you right sayReplyDelete
I wish you good luck in your future endeavors, as you correctly mentioned some of the traits of the so called fake/bogus gurus. Eagerly waiting for your new article in this regard.ReplyDelete
Its an interesting read as you covered all types of Bogus Gurus. Specially, I like your points on Day trading and Stop loss. However, I believe training and consultancy is required in every business and Stock trading is a complex skill so training and learning would help. Take my example, I knew nothing about TA and I am still a novice but attending a TA course helped me build my skills in this area.ReplyDelete
If someone is sincerely giving TA classes, that does not count as bogus guru. But there is a fine line, often in PSX course gurus are only accumulating free material over the internet and selling it for a fee with very little originality or hands on trading. There are genuine tutors out there, they do not come cheap!Delete
Excellent piece of work. Wish I had seen ur work earlier. thanks.ReplyDelete
Although Iwas out of the meeting but the Q&A session here above really impressive. How should I become your member plz.ReplyDelete