Nithin Kamath has advice for investors: “Take a break from trading and recharge”. The co-founder and chief executive officer of Zerodha said this on X amid market volatility driven by global uncertainties, including\u00a0Donald Trump\u2019s now-suspended tariff announcements.\u00a0<\/small><\/p>\n\n\n\n
Kamath\u2019s advice on Wednesday came when domestic benchmark indices extended their losses, despite the Reserve Bank of India cutting the repo rate and changing its monetary stance. Indian equity indices ended on a negative note with Nifty down 136.70 points at 22,400. BSE Sensex closed 379.93 points down at 73,847.15. Whereas today Sensex rises 1310 pts, Nifty above 22800. <\/small><\/p>\n\n\n\n
Indian stock markets have as of April 9 dropped over 15 per cent from the 52-week seen in September 2024. The Wednesday slump wiped out gains made by retail investors during the post-pandemic market rally. Markets rebounded on Friday, with the Sensex gaining 1,300 and the Nifty settling at 22,828.55.<\/p>\n\n\n\n
\u201cOver the next 10 days, there are only 4 trading days. It\u2019s not a bad idea to take a break from trading and recharge,\u201d Kamath posted on X. <\/small><\/p>\n\n\n\n
Kamath said the market is not suited for active trading. He referred to materials from Zerodhaversity, his stockbroking firm\u2019s investor education platform, to stress the need for mental preparedness and situational awareness in trading \u201cIt is vital for one\u2019s survival to know when to stay out of the markets. Trading profitably requires that you monitor the market moods and your psychological moods. When either one is not conducive to trading, it\u2019s best to stand aside and wait for the situation to change.\u201d<\/p>\n\n\n\n
Caution against panic and poor decisions<\/strong>\u00a0<\/small><\/p>\n\n\n\n Kamath warned that many investors who entered the market after the pandemic may not have faced a downturn of this nature before. This unfamiliarity can lead to anxiety and poor risk management, he said. <\/small><\/p>\n\n\n\n He cautioned against assuming that this downturn is simply a buying opportunity. \u201cBy the way, if markets fall sharply, investors might stay out of the market for years\u2014just like they did after 2008,\u201d he noted.\u00a0\u00a0<\/small><\/p>\n\n\n\n Why Kamath is recommending caution<\/strong>\u00a0<\/small><\/p>\n\n\n\n Kamath believes inexperienced investors are at risk in such volatile conditions. He reckons that taking a pause now could help avoid lasting financial damage. His message echoes sentiments from an old podcast by Jerry Parker, founder of Chesapeake Capital Corporation and a known \u2018Turtle Trader\u2019, which Kamath cited in his post.<\/p>\n\n\n\n Here are the key takeaways from the podcast that Kamath highlighted:<\/p>\n\n\n\n Live to play another day<\/strong>\u00a0<\/small><\/p>\n\n\n\n Kamath referred to legendary trader Jerry Parker’s rule on cutting positions when losses begin to mount. <\/small><\/p>\n\n\n\n \u201cThis is a Turtle Rule. When you have a drawdown, you reduce your positions twice as fast as the drawdown. So, if you\u2019re down 10%, you should reduce your positions by 20%,\u201d Parker said in the clip shared by Kamath. <\/small><\/p>\n\n\n\n According to Parker, many traders hold on to losing stocks hoping they\u2019ll recover, while booking quick profits out of fear they\u2019ll vanish. \u201cWhen you have a loss, you\u2019re thinking, I\u2019m hopeful that it\u2019s going to come back\u2026 but that\u2019s when you should be fearful,\u201d he said. On the other hand, he added, \u201cwhen we have big profits, we\u2019re very fearful it\u2019s going to turn into a smaller profit, but that\u2019s when we should be very hopeful.\u201d<\/p>\n\n\n\n Avoid self-inflicted mistakes<\/strong>\u00a0<\/small><\/p>\n\n\n\n Kamath echoed Parker\u2019s view that over-trading and not following a disciplined strategy are common traps. \u201cMost of that was all self-induced anxiety,\u201d Parker said in the podcast. \u201cThe two biggest mistakes we make? Over-trading and not following your system.\u201d<\/p>\n\n\n\n Eqwires Research Analyst<\/a><\/strong><\/p>\n\n\n\n Top-notch SEBI registered research analyst<\/a><\/strong><\/p>\n\n\n\n Best SEBI registered Intraday tips provider <\/a><\/strong><\/p>\n\n\n\n info@eqwires.com<\/strong><\/a><\/p>\n\n\n\n Telegram <\/a>| Facebook <\/a>| Instagram<\/a><\/strong><\/p>\n\n\n\n Call: +91 9624421555 \/ +91 9624461555<\/em><\/strong><\/p>\n\n\n\n www.eqwires.com<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" Nithin Kamath has advice for investors: “Take a break from trading and recharge”. The co-founder and chief executive officer of Zerodha said this on X amid market volatility driven by global uncertainties, including\u00a0Donald Trump\u2019s now-suspended tariff announcements.\u00a0 Kamath\u2019s advice on Wednesday came when domestic benchmark indices extended their losses, despite the Reserve Bank of India cutting the repo rate and changing its monetary stance. 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