Why paid trading tips are more dangerous?

You can lose your investment amount from free trading tips but what about paid tips. Surprisingly paid tips can make you suffer more because in this you not only lose your invested amount but also your subscription amount. Just conduct a basic Google search. You will find several trading tips provider showcase fabulous past performance, promise 50%-100% monthly return and offer 2-3 days free trial. Now I will show you how any stock tips provider can trap you from offering 4 days free trial tips. (The following concept, is taken from jagoinvestor.com, India's leading person as finance blog by Manish Chauhan)

How paid stock tips scam works?

Suppose I develop a website for stock tips scam and offer as follows - “Our latest stock trading strategy can predict the stock price movement with 99.99% accuracy. Join our 4 days free trial for intraday tips and check out yourself how you can earn big from our highly accurate trading calls.”
From the statement “4 days Free Trial” many investors will immediately join. I can also purchase database (email-id and mobile numbers) of demat account holders to run this scam. In such manner, I collect mobile number of 5,000 traders. Consider Rohit as one among 5,000 subscribers. Each day I will send a single trading call via SMS. So, here goes my “4 days Free Trial”.
Tip 1 (First Day) – Reliance Industries will move up today. Buy Reliance for immediate intraday gain.
Reaction - Reliance really went up. Rohit feels good; however he is confused and not sure. It may be just because of luck. Anyways 3 more free trial calls are left. Let's see what happens.
Tip 2 (Second Day) – Reliance will go down today. Short-sell and gain from intraday. Short sell refers to selling first and then buying at lower rate to gain on the same day.
Reaction - Reliance really moved down. Great, Rohit is amazed at the performance. In spite the market moved up, this particular stock is down! There must be something with the trading call. His confidence has started building up. If the next tip works, then Rohit can surely invest some money. Now he is excited to receive the next call and verify the performance.
Tip 3 (Third Day) - Reliance will go down today. Short and gain from intraday.
Reaction- Reliance really moved down! Rohit now surprised. He can't believe 100% accurate calls consecutive days. The strategy is really amazing. He is now ready to trade as per the last (4th tip) free trial tips. He already started calculating on how soon he can make big gain from following such amazing calls. He can't wait for the last from trial tips.
Tip 4 (Fourth and Final day) – Reliance will move up today. Buy for intraday gain.
Reaction - Rohit had put 1,00,000 to make some quick bucks. He was nervous at the beginning as there was no such upward movement in morning trade. However the stock really moved up during afternoon trade and he was in good profit! He booked the entire profit as per the call and was super excited. He made his mind to follow the tips at any costs and thus can easily earn big bucks in short period of time. He is ready to sell his other investments to dedicate the entire sum in trading calls. Rohit can now visualize how he can become a millionaire by subscribing to the tips over next 1-2 years.
4 days Free Trial Tips are over
Rohit and many such already experienced the magic. 4 consecutive calls and all are perfect. 100% success rate on 4 days trial is really amazing. Now, here my message goes, “You already experienced our 4 days trial and noted how accurately we predict stock price movement. Years of hard work and research helped us in developing such highly accurate strategy. If you want to continue with our daily trading calls,
it would cost $20,000 for 6 months. You can also subscribe to our 1 year package at discounted rate of 30,000 only. You can expect the same accuracy like our “4 free trial calls.”
The subscription amount is bit high but Rohit had already experienced the amazing result. Subscription amount will be easily covered within 1 month of trading and visualizing himself as a millionaire over next 1-2 years, he wants those calls at any cost. With little hesitation, Rohit subscribed to 1 year package of intraday trading calls for 30,000.
The tips are coming from the very next day but there is an issue. Somehow, this time not all tips are working. Out of 10 intraday calls 4-5 are working and rest are not. Rohit is fully frustrated. He already had invested a big amount and staring at big loss! Every time he thinks it will work and recover the entire losses, opposite happens. The loss keeps getting wider!
Actually, Rohit got trapped in stock tips scam.
Now, let's see how this scam actually works. Initially I had 5,000 subscribers. I divide them into two groups (2,500 each) - Group A and Group B. I send “Buy” call to Group A and “Sell” call to Group B. Now, either the stock price will move up or down. So, one of them will be surely correct. I already noted which one is correct. The stock moved up, so “Buy” call to Group A was correct. I retain Group A and discard Group B. Now I have 2,500 subscribers (Group A) and repeat the process. Divide the 2,500 into two groups, send “Buy” call to one and “Sell” call to another. One must be correct. I again retain the correct one and discard the group that received wrong trading call. I repeat the same process for 4 consecutive days and end up with a group of 312 people who received all 4 correct tips. Rohit is one among those 312 people.

Now you can imagine how people get trapped into scam. I can easily reach out to those 312 “Targets, over phone call for follow-up and final subscription Out of 312 even if 50% i.e. 156 subscribers finally opt fi 6 months subscription, then also I can easily earn 12920 (near 30 lakhs) (156*20,000 = 29,20,000). So, earning lakhs rupees based on nothing rather simply cheating or is a serious deal and an easy task. The beauty of this strategy is after getting 1 wrong call the same person is not receiving further calls. Out of the 5,000 group 312 subscribers getting right on every occasion and it becomes very easy to trap them.
In real life you will find many trading tips provider claiming 90%- 95% success ratios. Just conduct a Google search with “Intraday Tips” or “Trading Tips”, or “Stock Tips India” and you will find 50+ websites offering such “3-4 days free trial”. Interestingly all of them are claiming 90%-95% or even 100% success ratio and showcasing fabulous past performance. Subscription fees are always on higher side. I really surprised to notice those.
You may also receive various phone calls from stock tips provider to join their 2 days trial service. During bull market, such calls are very common. Even, I used to receive many such calls. Initially, I wondered how they obtained my phone number. Later I realized that many companies sell their database of clients. Once I open trading account, it is quite possible that from there my mobile number spreads into various such stock tips provider. Now a day to rescue from such operators, I simply mention, “I don't trade” or even “I am not interested at all in stock trading.”
Next time onwards, if anyone mentions such bullshit like “90%-95% accurate trading tips for 50%+ monthly gain with 2 days trial”, simply ask why you guys don't trade

on your own. If your calls are so accurate then what's the necessity of selling tips. If they still keep on talking rubbish, simply disconnect the call.
Short-cut to figure out fake stock tips provider –
Be aware from trading tips provider. Trading includes intraday, short term, Futures and Options. Be aware of high return promises. 50%+ monthly return promise is the almost sure-shot sign of fraud. You should only choose equity advisors who provide investment tips with detailed logic and proper report on the company. Most trading tips providers don't provide any logic. They just mention Buy with target and stop loss. Ask them what is the logic behind the call? Find out whether you are getting any satisfactory answer or they are just avoiding it? Don't get fascinated by the fabulous past records and few clients' testimony. Those can be false also. Various new methods are coming day by day to trap innocent investors. So, always be aware
“Very high return promise within short period of
time is dangerous"