SEBI (Securities and Exchange Board of India) released data showing that around 90–95% of individual traders in the Indian stock market (especially in F&O – Futures & Options) incur losses.
Here’s what the report revealed:
89%+ of traders in index options lost money. Around 90% of those who traded actively ended up in net losses. Average loss per trader in the year was approx ₹1.1 lakh. Only 11% made profits, and a very tiny fraction made consistent gains. Most profitable traders were very few but made large gains, while losses were widespread and common.
Here are the key reasons, especially in the context of Indian retail traders:
Lack of Knowledge / Overconfidence
No Risk Management
Overtrading
Trading in Derivatives Without Understanding Them
Emotion-Based Trading
Lack of Discipline and Patience
How to Avoid Being in That 95%?
First of all, in India Share Market you need to learn basic things like, candle sticks, patterns, support and resistance, market trend etc. etc these all are very basic things in this market after that all the new traders will start their journey in Equity Market not in Option Trading, if you will proved yourself profitable trader in Equity Market. Then you will shift from Equity to Option Trading. Please note that Option Trading is very risky and 90% traders when entered in share market they directly come in Option Trading and incurred very high losses.
In our suggestion, Option Trading is very risk you need at least 2 years of experience after entering option trading.