Stock market trading is easy! You must watch three or four ten-minute videos on indicators and apply the same while you trade. Within a month, you can easily double or even triple your investment. And the best part? You need to spend five minutes on stock markets daily!
Does the above feel like a scam to you? If yes, congratulations, you have enough knowledge to see through a so-called youtube stock market’ expert.’ But the problem with India is that the lion’s share of us is still learning and figuring out stock markets.
They are susceptible to such scams as their knowledge is limited. That is precisely what the influences use as leverage to ramp up their view counts. Indians, who always favoured tangible assets like gold, have to come a long way to start to trust stock markets as a form of investment. When people lose money believing such scams, it drags us back to square one. But what can be done here? How do these scammers hurt the stock market traders? And how can you steer clear of them? Read on to find out.
The hardships that half-baked knowledge creates
Recently, many famous and popular YouTubers in India received insensitive criticisms when a cryptocurrency-based savings programme that they broadly and blindly endorsed cost thousands of people their hard-earned money. This is a prime example of how half-baked information can be harmful. It is no secret that mastering stock markets is a hard job. Even with years of existence, traders and experts are yet to figure out trading completely.
For a new investors, these could be days when their perseverance is being tested. Such a newbie may look at many sources to feed their curiosity. But when someone stumbles upon such a scam, they may think they have finally cracked trading and investing and trust them blindly.
Hence, as a trader or investor, the first thing to develop is the basics. Understand what stock markets and other forms of trading, including cryptocurrencies, are before investing in them. This basic understanding could able you to differentiate between these scams and truthful information.
But unfortunately, the damage these scammers do is not limited to money loss alone.
Dilution of information
The internet is a wild place. It has a humongous amount of information. But you must understand that publishing something on the internet has become very easy. You can use more expensive servers and professional web designers to start an entire website. In fact, for an influencer, all they need is social media.
Yes, the internet being open to all is revolutionary, and that is precisely the right way, but one big downside is the dilution of information it creates. When such content creators publish wrong information or half-truths, it is often compared with the correct information on the internet. Unfortunately, the right information may also sometimes have the glitters of false opportunities. This creates a situation where finding correct information becomes extremely difficult.
Stock market trading is highly regulated. In India, the securities and exchanges board of India (SEBI) has an extensive set of rules that guide the trading processes. The rules are made so that no one gets an unfair advantage and the market treats everyone equally. But when the so-called influencers arrive at the scene with their ‘tricks and tips,’ they may invariably break some rules. When ordinary people who might not have the poorck market knowledge try to follow these stunts, they may get stuck doing something illegal. This is another reason why avoiding such sources at any cost becomes extremely important.
How to safeguard yourself from misinformation?
This spread of misinformation must be fought at all costs. But a significant change might take time. Till then, the best course of action is to safeguard against such information on an individual level. Below are a few pointers that could help you.
1) Verify the source – There is one unmistakable quality that valuable and accurate sources of stock market information possess – a time-tested track record. When you get a price of information about that magic trick that could earn you millions, pause for a moment and think – has this person made the said millions? Or what backs up this person’s knowledge. This can be put in a much simpler way as well. If someone pops up in your life all of a sudden ask tells you that they know how to double your money, will you trust them and hand over your wealth? Similarly, check the source’s trustworthiness before you even consider the advice.
2) Build your knowledge – Most of these misinformers take complex stock market theories and explain a tiny portion that is easy to understand. For instance, if you take the example of support and resistance levels, these are points in a company’s price chart where the price is difficult to cross. Learn how to read powerful candlestick chart patterns.
The upward trend is restricted by resistance, and the downward trend is restricted by support. Of course, there is a chance that the price may bounce back when these levels are hit. But that is not guaranteed. You have to consider many other factors for this to be true. But a so-called expert with half-baked knowledge may only teach to buy when the support level is hit and sell when the resistance level is hit. There are multiple other factors to consider, which may result in money loss. But you could see the foul play from a mile away if you have built enough knowledge.
But how do you build your knowledge when the internet is filled with such influencers? The best way is to go for trusted personalities with a proven track record. For instance, India charts offer a comprehensive learning platform built on years of experience and knowledge. Finding a comprehensive and truthful source of information and learning from the basics is the only way to ensure you stay safe and understand the stock markets correctly.