In the last few years, the interest in trading has increased significantly. Some give time and upgrade their skills gradually while some in the thirst for quick gains often get trapped in one or other scam.
Now when someone gets into trade they soon come across different ways to upgrade their trading skills. Here is when algo-trading software becomes their choice of interest and takes their trading to the next level.
However, a large number of those exploring advanced algo trading don’t consider giving time to proper research of the software. Thus, with little understanding of the market, they often choose fake software, losing their hard-earned money by falling for promises of high returns and quick profits.
Caught up in dreams of rapid wealth, they overlook the fact that algo trading software is merely a tool that helps execute their strategies to make quick market positions. No algo trading software guarantees profits.
Let’s take an example to understand what algo trading software does.
Consider a strategy where you buy when the moving average is below 60 and the RSI is above 45. For manual trading, you need to monitor the stock regularly for optimal entry points. However, many traders fail to do this, especially if they aren’t active.
This is where algo trading software comes in: you input your strategy, and the software executes trades when the conditions are met, allowing you to focus on other tasks. Simple, right?
Unfortunately, many misunderstand this and believe it’s a magic solution for profits, which is misleading. Due to a lack of information, they often get trapped by scammers’ false promises, not realizing that these software programs need proper certification.
Recently, we encountered a case involving a victim named Avinash, who lost around ₹1.4 lakh to a fake algo trading software.
How Avinash Lost ₹1.4 Lakh in Algo Trading Scam?
Avinash, a young trader, began his trading journey four months ago. He was learning and making small profits through manual trading. However, due to his full-time job, he often missed out on better trading opportunities.
Upon hearing about algo trading software, he eagerly started searching for options. He soon landed upon a website promoting an algo trading program filled with claims of 100% profits and guaranteed returns.
Without any second thought, Avinash submitted his details for a callback. The following day, he received a call from the company, where a representative detailed how their software employed “secret strategies” that ensured profits for every trader.
To build Avinash’s trust, they provided a demo, which indeed turned out profitable. Excited, he inquired about charges and paid a hefty fee of ₹1,12,000 without further verification of the software.
He then added ₹50,000 to trade but suffered a loss of ₹30,000 in a single day. Unprepared for this, Avinash reached out to the software company but received no response.
A few days later, he discovered that the website had vanished. His dreams of quick wealth had turned into a nightmare. Discouraged, he even stopped his manual trading, which had previously been yielding small gains.
Avinash Fight for Recovery!
Determined to take action, Avinash gathered all relevant evidence, including chat logs and transaction records, and sought help from our team.
We checked the name of the algo trading software on the NSE website, only to find that none of the companies with that name were certified by the exchange. This confirmed that Avinash had been scammed.
Our team advised him to report the case to Cyber Crime, and he is currently awaiting a response from the Cyber Police, hoping for recovery of his losses.
What One Must Consider While Choosing Algo Trading Software?
Incidents like Avinash’s underscore the importance of having a checklist to identify genuine algo trading software.
Here are essential tips to consider:
- Check Registration and Certification: Always verify the registration and certification details of the software. You can request this information from the provider or check the NSE website.
- Beware of High Returns Promises: Genuine algo trading companies do not lure clients with claims of high returns or guaranteed profits. Stay away from those who use such tactics.
- Look for Hidden Costs: Ensure there are no hidden fees associated with the software purchase. Any undisclosed costs should raise red flags.
- Broker Integration: Confirm if the software integrates with your broker’s app for seamless trading.
- Verify Data Sources: Genuine software provides access to reliable data sources, ensuring the credibility of its products and services.
Consider these factors and follow the tips above when selecting algo trading software to enhance your trading skills responsibly.
