'Without a plan...': Zerodha's Nithin Kamath issues stark warning for traders in this market

Zerodha founder Nithin Kamath issued a stark reminder to traders: risk management isn’t just a strategy; it’s survival. “In over 20 years in this business, I haven’t seen anyone keep profits from trading without good risk management. Many have lost quickly,” he stated. “Without a plan to manage risk and size bets, it’s impossible to hold onto the money you make.”

Kamath shared his insights, channeling advice from market veteran Tom Basso, who attributes his own longevity to disciplined risk management. Basso’s approach prioritizes balancing risk exposure—both in each position and across the portfolio.

Kamath explained, “Each trader must find that balance. Too little risk means zero return, while too much can wipe you out. It’s about setting a comfortable level that keeps every position contributing to the portfolio’s profit potential without risking a total loss.”

Kamath also stressed that even with solid risk management, a trader’s success hinges on awareness and discipline. “Start with awareness so you can recognize when you’re getting greedy, cutting trades too soon, or doubling down on a loss to ‘teach the market a lesson,’” he added, quoting Basso. “These are the traps that, over time, derail traders.”

Kamath’s bottom line is clear: without disciplined risk controls and self-awareness, traders are setting themselves up for failure. For those serious about staying in the game, managing risk isn’t just a tactic—it’s essential.