Why only 1% of traders make money - Nithin Kamath's personal homepage (2024)

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Why only 1% of traders make money - Nithin Kamath's personal homepage? ›

I'm surprised that, so many are surprised that just 1% of active traders make more than bank fixed deposits over 3 years timeframe. Active trading is like running a business, only a small % succeed. The only easy bit about trading is starting trading.

Remember, the 1% who succeed do so because they persist. They don't quit, and they view failures as part of the learning process. Fix your mindset on not giving up; focus on the process rather than immediate results. Trust the journey, and one day, you'll find yourself among the 1% of successful traders.

Zerodha co-founder Nithin Kamath shared valuable insights about trading, emphasising the challenges and risks involved in the pursuit of quick profits.

The average salary for Stock Trader is ₹73,017 per month in the India. The average additional cash compensation for a Stock Trader in the India is ₹28,017, with a range from ₹833 - ₹55,200.

Traders buy and sell stock, currencies, bonds, cryptocurrencies and other financial assets to make a profit, usually dealing on behalf of, or for the benefit of, investment banks.

The 1% risk rule means not risking more than 1% of account capital on a single trade. It doesn't mean only putting 1% of your capital into a trade. Put as much capital as you wish, but if the trade is losing more than 1% of your total capital, close the position.

One of the biggest reasons traders lose money is a lack of knowledge and education. Many people are drawn to trading because they believe it's a way to make quick money without investing much time or effort. However, this is a dangerous misconception that often leads to losses.

Seema Patil, wife of Zerodha CEO Nithin Kamath, bravely shared her battle with breast cancer. Diagnosed in November 2021, she underwent chemotherapy, a tough journey she described as feeling like it might be better to die. However, after a year of treatment, she was declared cancer-free.

Nithin bootstrapped and founded Zerodha in 2010 to overcome the hurdles he faced during his decade long stint as a trader. Today, Zerodha has changed the landscape of the Indian broking industry.

The two brothers who created the stockbroking platform, Nithin and Nikhil Kamath, took a total of Rs195. 4 crore in salary in the fiscal year 2022–2023 (FY23). The full-time directors and co-founders of Zerodha received Rs 72 crore per year each, according to a study issued by Entracker.com, as reported by Mint.

Who is the richest trader in India? ›

But, those who follow strict trading rules can easily make an income of over $100,000 per year or more. Likewise, the national average salary for day traders who work for a company is $122,724 (source: Glassdoor). You can see below that this average varies based on where you work.

Traders participate in markets through buying and selling securities; day traders, by definition, usually enter and exit positions in a single day. Day trading can happen in any marketplace but is most commonly seen in the stock markets and foreign exchange (forex) markets.

The amount of money a trader can make depends on several factors such as their skill level, experience, strategy, market conditions, and risk management. Successful professional traders who have developed effective trading strategies and possess extensive market knowledge can generate substantial profits.

Less than an hour is typically spent trading by many part-time traders. However, full-time traders typically trade for two to five hours a day, which is a greater amount of time. It should be noted that there is frequently no relationship between a trader's performance and the number of hours they use.

Approximately 1–20% of day traders actually profit from their endeavors. Exceptionally few day traders ever generate returns that are even close to worthwhile. This means that between 80 and 99 percent of them fail.

However, various studies and industry estimates suggest that the proportion of traders who achieve consistent profitability and sustainably trade full-time ranges from approximately 5% to 10%.

Ineffective Risk Management: Failure to manage risk properly, such as putting too much money at risk in a single trade, is a common cause of failure. Unrealistic hopes: Some traders join the market with unrealistic hopes of immediate gains.

Lack of trading discipline

This is the primary reason for intraday trading losses in the intraday trading app. Trading discipline has to focus on three things. Firstly, there must be a trading book to guide your daily trading. Secondly, you must always trade with a stop loss only.