Nithin Kamath Warns on Position Sizing Risks

Nithin Kamath, the founder of Zerodha, shared an important lesson for traders.

He said that even if you're right about the market most of the time, you can still lose everything if you don't manage your position sizes correctly.

This means deciding how much money to put into each trade.

Kamath explained that one bad trade, if it's too big, can wipe out all your previous profits.

He talked about a famous trader, Tom Basso, who learned that you need to consider three things when deciding how much to invest in a trade: how much risk you're taking, how volatile the market is, and how much margin you're using.

By following these steps, traders can protect themselves from big losses and make better decisions.

The main point is that surviving in the market depends not just on being right, but also on how much you bet on each trade.