Below is the original article that was published on my blog today at http://charttechnicals.blogspot.in/
I am sure you would have been tempted at least once in your life by reading the ads like "Jackpot call," "100% accurate stock tips with guarantee," "99.9% guaranteed profit," "Enjoy daily profits" but wondered whether it is really possible. The answer is yes, it is possible. One can guarantee such returns in stock trading and those who make such claims provide free trails to try it out so that you can trust them and opt for the subscription. But wait for a moment and think how is it possible?
Lets learn the modus operandi of these so-called advisory firms whose only aim is to lure you and earn from you.
There is a rule of probability that applies here.
First, they will generate new inquires every day as much as possible and advise you to go for the trial which can last from 1 day to 3 days. They do not give trials usually more than that whether the trials got right or wrong. So usually they will look for a good number of potential customers who can pay after getting the trials.
Now what they do is, suppose they have 40 trial customers on any day. They will apply the 50-50 probability rule. They will send a buy call of the XYZ stock to 20 customers and sell call of the same stock to remaining 20 customers. Now either of it will be proved right. Suppose if the stock rises after the call, those 20 customers will feel they got 100% accurate call and they may think about opting for subscription service in the future. The remaining 20 will obviously discontinue it as the call did not work for them.
Now some customers out of these 20 customers will not go for subscription on the basis of this 1 day trial, some will do. So now this advisory company will again repeat the same trick on those 20 customers. They will get divided into again two groups of 10 each. One group will be given a buy call of some stock/commodity and another will be given a sell call of the same. Now as you know, any one of the call is going to be right. Here, those 20 people were already given 1 so-called 'successful' trial and out of them now 10 persons have taken 2nd successful trial. Now this advisory company will again ask for subscription money from these 10 persons claiming that they were given 'two sureshot trials' as promised.
Now if some customers ask them to give more trial, again they will repeat the same trick, divide these 10 into two groups of 5+5 and then again give buy call to one and sell call to another group of 5. Thus, as you can predict, 20 customers out of those 40 trial inquiry people are given 1 so-called 'sureshot' call, 10 are given 2 constant successful trial calls/tips and 5 are given 3 constant successful trial tips! So at the end of 3 day trial period these 5 people are going to go for a subscription for sure.
Now you would have realized how easy it is to give 100% accurate calls without having any knowledge on the subject, and this was the sole purpose of this writeup to make you aware of such fraudulent companies and not getting into the trap of their malpractice and cheating.
Beware of them...and rely only on your knowledge and experience.