Zerodha founder Nithin Kamath delivered a stark reminder to traders: risk management is not just a strategy; it is survival. “In over 20 years in this business, I have never seen anyone keep trading profits without good risk management. Many lost quickly,” he said. “Without a plan to manage your risk and size bets, it’s impossible to keep the money you win.”

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 within each position and across the portfolio.

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

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

Kamath’s conclusion is clear: without disciplined risk controls and self-awareness, traders are setting themselves up for failure. For those who want to stay in the game, risk management isn’t just a tactic, it’s essential.