Nithin Kamath from Zerodha gives tips on risk management for stock market investors: from errors to cutting losers

Nithin Kamath, Chief Executive Officer from Online -Brokerage platform, emphasized the need for risk management as an stock market investor in his latest contribution to the social media platform X on March 17th.

In his post, Kamath said that during his time as a dealer and broker he realized due to the interaction with many successful dealers that the common element for their success and their lifespan in the Indian markets is risk management.

“In all my time as a dealer and broker, I interacted with hundreds of successful traders, both large and small.

Nithin Kamath's tips on risk management

Nithin Kamath, head of Zerodha, stated some tips from an old podcast by Jerry Parker, the founder of the investment company Chesapeake Capital Corporation.

It is believed that Jerry Parker is one of the Turtle dealers, a group of rookie dealers who were trained by the legendary raw material dealers Richard Dennis and William Eckhardt who pursued a specific regular-based strategy.

1. Life to play another day: Kamath raised the need for investors to be aware of the stock markets and stay alive to play another day. In his old Podcast interview, Parker emphasized a “Turtle Trader” rule that an investor should reduce his investments twice as quickly as the dismantling.

“This is a turtle rule.

This rule remains relevant for the current markets, and investors should reduce and live the positions in the event of impending risks to combat another day.

“I think it still applies that you have one rule that always works.

2. Cut losers and let the winners drive: Kamath's second highlight was Jerry Parker's ideology to reduce the defeats and let the winners drive. Börsen investors should pay attention to the intraday trade before their active losses, since the losses can become very quickly.

“I used to say that if you have a loss, I think, I hope it will come back and turn into a winner, but then you should be afraid that the loss will grow bigger,” said Parker according to the post.

Investors sell their shares too quickly on the profit page because they think about losing the smaller profits. According to Parker's take, investors should be hopeful for a larger profit.

“And then the biggest mistake is when we have big winnings, are very scared.

3. Error: Errors are essential for every stock market investor. Nithin Kamath emphasized Parker's attitude towards mistakes, the said that “overhand trading” and “unpassed systems to a T” were one of the great errors that people can be driven by self -induced fear.

“But most of it is of Transfering and not a T-Tat of 100%, as much as possible, most of them.

“The markets can somehow hand over it, I love playing the game and playing it.

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