Anatomy of the Stock Service Scam

From vast experience testing 100s of indictors, chat rooms, call services, trading advice, stock-picking – it’s sad to say but the majority are scams. From what we see it’s a combination of the physiology of the new trader, the hope, confusion and excitement and the complexity of the environment. This creates a playground for scammers and unscrupulous people who flock for the easy pickings like hyenas. These scammers would probably be selling snake oil to sick desperate people, if that industry wasn’t so regulated, so the next best is the wild west of the stock market.  

Ask yourself a simple question, and this should be the first question asked to any potential trading product/service – show me the verified results. The vast majority of stock trading products/services are not backed by data/results. When it’s so simple to track and report on every single metric, outcome and important trading ratios such as win/loss, expectancy, and profitability. In addition, there are hundreds of back-testing options that will prove an edge but bear in mind there are many pitfalls to back-testing, so it should not replace a long-term track record of verified real money trades that show a clear edge.  

Please ensure you read our sister post of what a good service looks like so you can make an informed choice about whether the service you are looking at is run by a scammer because the truth is the vast majority are much better marketers than traders, and it will take time, heartache and hard-earned money to determine you are working with a marketer or worse scammer.   

However, if you have already taken the plunge – and are not feeling right not getting the right results then the read the below summary to help determine who you are working with:  

Common traits of these cons: 

Creation of family (cult) 

First up and this is an important one, a stock scammer will try to create a family, think cult with a nice friendly vibe. Scammers know and understand they need sheep, followers, and defenders. This is achieved by creating cult appeal, the common way of doing this is appealing to emotions. This can be either greed, buy offering an inner circle, better access, VIP for members who behave a certain way. Another way is by creating a ace to belong, a home, people have deep desire to be part of something, a movement, a method – the scammer knows this and often promotes their service as changing the game, together we are going to change X and Y, make it better for next generation. Another method for the scammer to promote themselves as a charitable, a tireless worker for the good of others. These are powerful tactics that make the sheep very defensive, and prone to attacking other members who question their master, which is of course just what a scammer wants and needs.   

Purveyors of enlightenment and positivity  

The scammer will always preach enlightenment and positivity, this plays several important roles. The first is strengthening the defender’s dedication and commitment, our master is not only a skilled guru, taking his precious time to teach us but a great and valiant person too. Putting the master on a pedestal, a position he loves to hold. It also has the counter benefit of reducing the strength of anyone calling the master/service into question. The sheep defenders can now easily rally against this person - now that a label has been assigned, a phycological tactic designed to reduce the empathy of the attackers. A questioner is no longer a person like them with valued concerns, but a person of low positivity a negative nelly that can and will drag the group down. This creates an excuse, a reason to attack, obviously this person’s positivity is the problem in their success, not the validity of the master’s calls/service.  

Expert in misdirection and confusion  

The scammer's service cannot be well managed, with rigorous process and reporting, else it would give the game away. A very common tactic witnessed in numerous chat rooms is the “barrage”. A constant stream of trades, that are called but not managed, often with no management or exit strategy. Winners are promoted heavily, and losses never mentioned.  

The stock scammer will bask in the glory and delight of every winning trade, often posting to social media channels and asking the sheep to promote, often with encapsulated messages like BOOM, 100 BAGGER, pictures of car shopping, emoticon covered posts: money bags, dollar signs and every other form of aggrandizing behavior – caution the stock scammer who heavily promotes big wins. Yet, there will be no mention of a loss, losses are never spoken about. The typical success ratio is something like this: the stock scammer provides 10 trades, 6/7 were losses, probably 2/3 heavy losses, 2/3 small winners and 1 big winner, likely very simmer odds to what you would get if you picked 10 stocks based on flipping a coin. Yet that one win be a rallying cry to the master and the sheep. If asking about losses, the purveyor of positivity steps in, and the sheep rally against the negativity. Didn’t you take the huge winner, why are you focusing on the loss, you should have been out of that ages ago. 

This keeps people, guessing, is it their ability to follow trades, was it their bad luck, they missed a winner everyone else had … Don’t get sucked into this, this is a poorly run service for a reason … misdirection.   

Teflon accountability  

Further questioning of the masters skills and accountability will be met with the “Teflon” accountability. This is a made prophecy in the stock scamming circles. Own your own trades, you cannot hold the group/service/person responsible for your trading mistakes.  

Caveat – it is 100% correct when placing trades in your own account, a person must take 100% responsibility for that trade. Do not place a trade solely on any other person/series/expert opinion, unless you want to go broke and quick, based on the numerous services we have tested less than 5% offer positive ROI without some additional management and or strategy assigned to the trades.  

However, the responsibility for placing a trade must not be confused with the responsibility for providing a product or service that is effective and “fit for purpose”. By charging fees for a service, there is an expectation of effectiveness and accountability by buyers of that service. Yes, you place the trade, but you are paying for expertise/research/skills that ultimately create an edge – if the service does provide value, an edge, a reasonable delivery against what is claimed – then provider of that service like any other service in the world owes an explanation. 

Scammers love to exploit this – pay me to for trading advice/calls/indicators - I am a guru, but any losing trades is entirely your fault, this is a mark of the scammer.