Nithin Kamath, co-founder of Zerodha, has cautioned investors against taking large positions in the current market environment, warning that survival, not profit, should be the primary goal for traders amid heightened global uncertainty.
In a post on LinkedIn and X, Kamath said it is “crazy” that global financial markets appear to be moving at the “whim and fancy of what one person decides to do”, highlighting the growing influence of global political developments and policy decisions on market movements.
His remarks come at a time when markets have been reacting sharply to geopolitical developments, policy statements, and overnight global cues, leading to frequent reversals and elevated volatility across asset classes. He explained that the current environment is extremely headline-driven, leading to sharp and unpredictable swings in both directions.
In such a market, traders often get “whipsawed,” meaning positions get cut on both the upside and downside due to sudden reversals, making it difficult to generate consistent profits.
According to Kamath, the most logical strategy in such a volatile environment is to reduce position sizes, lower overall risk, and wait patiently for clearer opportunities rather than taking undue risks.
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He also pointed out that there are three market holidays in the next seven days, which increases the risk for traders holding overnight positions, as global developments during market closures can lead to sharp moves when markets reopen. As a result, he advised traders to keep even smaller overnight positions during this period.
Kamath also spoke about the psychological side of trading, noting that trading is inherently a lonely activity and constant profit-and-loss feedback can take a mental toll on traders, especially during volatile periods.
With a long weekend approaching, he suggested that this may be a good time for traders to take a break, recharge mentally, and return to the markets with a fresh mind once conditions stabilise.
Kamath's comments come at a time when global markets have been witnessing sharp swings due to geopolitical tensions, rising oil prices, and uncertainty around interest rates, leading to increased volatility across equities, commodities, and currencies.
His message to traders is clear: in uncertain markets, the priority should be survival and risk management — not aggressive bets.
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