Why only 1% stock traders make more than FDs? Zerodha's Nithin Kamath explains
Premium- Kamath said that traders with an alternate source of income tend to do better or have higher odds of winning than those who rely only on trading for a living
Zerodha founder and CEO Nithin Kamath on Tuesday shared why only a small percentage of people succeed in stock trading. In a series of tweets, he said active trading is like running a business, only a small percentage succeed.
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"I'm surprised that, so many are surprised that just 1% of active traders make more than bank fixed deposits over 3 years time-frame. Active trading is like running a business, only a small % succeed. The only easy bit about trading is starting trading," he said.
Kamath said that traders with an alternate source of income tend to do better or have higher odds of winning than those who rely only on trading for a living. This is similar to how the businesses that are well-capitalized tend to do better than those that aren't, he added.
The Zerodha CEO further said that the pressure to generate profits daily or monthly can lead to more mistakes. "So in a way, traders who also earn by talking or teaching trading have higher odds of winning. But don't trust every profitable screenshot that people share to find ways to make money from you," he added.
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