I was totally new to stock market at that time. I was so ignorant that I didn’t even know how trading happens as in who is the seller when we buy stocks. I didn’t have the time or will power to learn. I don’t know how but my phone number got leaked to stock and F&O advisory companies. One company called me and promised me that they have plans like 16K fees for 50K profit, 64K fees for 2.5L profit and so on. I didn’t knew about risk involved with F&O.
Initially I was skeptical but eventually I fell in their trap. I thought them having SEBI approval means their advice can be trusted blindly. I bought the 16K plan. He gave me 3 futures trades on whatsapp. Within 3 days 50K profit was booked. He kept pushing me to increase margin so I could take more positions simultaneously. He convinced me to buy the 64K fee plan. Then 2-3 trades went right but 1 trade went wrong. I told him I am closing the position since price had hit Stop Loss. He advised me to hold. Unwillingly I did. Loss kept mounting up. He advised me to keep holding. Then expiry time came and he suggested me to roll over to next month future. I did what he wanted. Then to cover the loss, he told me to add more money to margin and start taking more positions in addition to what I had been holding. Again unwillingly I did. Then even in one of these new positions I made a loss. Again he suggested me to roll over the future to next month. By this time, I had accumulated a loss of 1L in my trading account and in addition had given this company 80K for advisory fees. This was massive loss for me and I was already looking for a way out, if possible to reduce loss, but at least not further increase loss. I never discussed any of it with my family so I had to deal with all of the trauma on my own.
Meanwhile although I had no more margin to take any positions, he had been sending me more trades, perhaps to show that I need not be disheartened and his other trades are ending in profit. I secretly decided to do a simple test of what is his success ratio. On average, he sent me 3-4 trades in a day. I kept noting down for a month whether his target hit first or stop loss hit first before expiry, no rollover. I found it to depend on market trade ie if market went up for a week, he scored 70% but if market went sideways or down, he came down to 30%.
Eventually I realized that markets cannot be predicted in short term at most times. Hence it is impossible to make money from any trading strategy for most people. Big money can earn because his position moves the stock itself but there’s no way for retail trader to earn by drawing shapes on charts.
Finally I decided to call it quits. My total loss including brokerage and advisory fees was to the tune of 2.3L. I blame my greed for the loss. The entire experience has taught me many valuable life lessons. The first of which is if it looks like easy money it is perhaps a fraud. Secondly I should be more critical of people. No SEBI or any other approval can guarantee non-fraud-iness. The only way is to understand what they are claiming to do and examining if it is even feasible. Thirdly and most importantly, retail traders should not touch F&O.
Now about the last one, I am still a greedy person and I do plan to someday create an automated trading strategy that works like a money minting machine for me. But I will deploy real money only after rigorous back testing.
BTW all this happened 2 years back. I have successfully not touched F&O ever since. If you have noticed NIFTY went up a decent percent since then.