How Fake Tips Providers Cheat Traders (And How You Can Avoid Getting Scammed)
Introduction
The stock market is ever-changing and many look to capitalize on the easiest methods to trading. For some, especially those new to trading or those who are somewhat desperate, the idea of going to a “tips provider” may be appealing. But this so-called service which promises high returns and “guaranteed” profits thrives on manipulation and deceit in the form of a dangerous industry.
The goal of this article is to raise awareness of the impacts of a tips provider. This blog will bring everything to light, explaining the masquerade and revealing how to outsmart fake tips providers while outlining sophisticated self-defense strategies.
What Is a Tips Provider?
Tips providers also go by the name of an advisor. They are individuals who purport to give buy/sell signals for equity, options, futures, forex, and even crypto for a certain fee or a commission.
Advisors registered with SEBI (India) or other regulatory bodies are legal practitioners. The ones that concern us are the ones acting online, most notably on Telegram, WhatsApp, Instagram, and YouTube—who are devoid of any qualification.
Why Are There So Many Traders Scammed?
Due to the tip providers leveraging human psychology.
Greed: Wanting effortless, quick profit.
Fear: The fear of missing out or making the wrong choice.
Laziness: Not willing to put in the effort learning the trading independently.
Desperation: Attempting to quickly recover losses.
Illegitimate tip vendors create the facade of trust, authority, and consistency.
“How Tip Providers Cheat Traders”
1. Dual Group Strategy (Winner Always Exists)
They shard their clients into multiple WhatsApp or Telegram groups, and each group has its own unique strategy.
For instance:
”Group A is instructed to buy Nifty calls.”
”Group B is instructed to buy Nifty puts.”
Regardless of the outcome, one group will “win” and get the correct prediction. Afterward, they are used for promotional testimonials and the rest are ignored or discarded.
2. Fake Profits and Losses and Edit Screenshots
Using screenshot editing, demo accounts, phony mt4 terminals, and broker account simulators, these vendors showcase fake profits.
For example, demonstrating 50,000 turning into 5 lakhs in a matter of minutes captures the attention of gullible viewers.
3. Paid Followers and Testimonials
Numerous Telegram channels purchase:
Fake social media followers
Paid reviews from Quora, Reddit, youtube
Phoney “happy client” videos featuring hired actors.
The objective here is to establish rapid synthetic social proof.
4. Pumping Illiquid Stocks
Some tip providers collude with operators to inflate the price of low-volume penny stocks.
Their actions include:
Purchasing the stock at an early stage for ₹5
Instructing 500 members to "buy now—target price is ₹15"
Selling their stake when the price has been sufficiently manipulated through trading volume
The subsequent loss in value results in clients suffering losses
This practice is illegal and takes business ethics to the lowest level.
5. Emotional Manipulation
Emotional manipulation tactics include:
“Only 5 seats left for premium group”
“Lifetime calls for ₹9,999 today only”
“If you don’t trust me, you don’t want to be rich”
Rational decisions fade away while traders become prey to FOMO.
6. No Risk Disclosure or Refunds
They remain silent on:
Potential risk of loss
No SEBI registration
No refund policy
Service quality deteriorates after payment is made, or complete blockage occurs.
Real Life Case Study
SEBI imposed a penalty on several unregistered advisory firms for deceiving investors. One case involved a Telegram group that promised “guaranteed option trading calls” and defrauded more than ₹50 lakhs by fabricating profits and fake testimonials. The admin vanished, leaving hundreds of traders with zero balance accounts.
Indicators of Tip Provider Fraudulence
Red Flag
Description
No registration with SEBI
Not listed as an Investment Advisor (IA)
Offers free signals and pushes premium subscription forcefully
Entices with complimentary tips, then demands exorbitant cost
Presence of profits only
No loss trades ever presented
Uses phrases like “sure-shot” or “guaranteed”
No one can guarantee stock movement
No documentation of personal trades
Doesn’t share real trading journal or broker statements
Only uses Telegram or WhatsApp.
Avoids public scrutiny by shunning open discussion.
Your protection strategy
1. Check for SEBI Registration
See the list of RIAs and RAs on their website. If there is no registration, do not pay.
2. Sidestep Impulsive Actions
Do not fall for hype, scarcity, or FOMO. Verification takes time.
3. Require free trial or sample
Providers of good reputation give free analysis or trial periods. Do not pay without due diligence.
4. Validate their assertions
Ask:
Will you provide actual broker trades (not screenshots)?
Is your trading funded personally?
Do you provide guidelines on risk management?
5. Participate in Learning Focused Groups
Concentrate in learning and join educators on:
Risk management
Psychology
Strategy creation
Journaling
Ideally, you want to be your own tips provider in the long run.
Legal Options for Beginners
Smallcase Portfolios – Curated collections of stocks.
Mutual Funds / ETFs – Automated investment strategies for consistent, long-term growth.
Investment advisors with SEBI licenses – for customized guidance which is ethical and tailored to the client’s personal values.
Teaching Tools – Zerodha Varsity, Elearnmarkets, TradingCampus
Final Thoughts: Smart Choices over Desperation
Every trader’s journey comes with its own set of challenges, and there are no shortcuts. People who claim to have “secret tips” only do so for their own benefit, and will drop you at the first chance they get as soon as the market turns. If there’s any consolation in the claiming that there is an easy solution to a complicated problem, it’s that the best approach is to straightforward ignore it.
What you should do instead is learn, study, backtest, and trade with discipline. All of these are useful when combined with steadfast resolve and real self-reliance.
Final Thoughts
“The market is a mirror—it shows your greed, fear, and lack of discipline. No tip can fix that.” No matter how big or small these marketplaces are, attempting to provide insights will never work.
If you found this blog helpful, pass it along to your friends who trade. The more people become aware of scammers, the less potency they will have.
