Nithin Kamath Explains Why Trading Less Can Make Investors More Profitable

Zerodha founder and CEO Nithin Kamath has said that most retail investors harm their performance by trading too frequently, adding that excessive activity rarely leads to better profitability. His remarks come at a time when many trading platforms incentivise high-volume transactions, especially during volatile market phases.

Kamath shared that Zerodha’s clients trade significantly less compared to users of other major brokerage platforms. “As a percentage of client funds, our brokerage revenue is 20–25% of our listed peers. That means our clients trade a lot less—75% lesser—as a proportion of their capital,” he wrote on X, arguing that lower trading activity reflects healthier investor behaviour.

Frequent Trading = Lower Profitability

According to Kamath, the belief that more trades lead to better returns is a misconception.
“With few exceptions, the more frequently people trade, the lower their odds of being profitable. More activity doesn’t mean better returns; it usually means a higher chance of blowing out your account,” he said. His comments highlight a common trend among new traders who feel pressured to stay constantly active in the market.

Why Platforms Should Promote Less Trading

Kamath also emphasised that responsible trading platforms should encourage lower trading frequency. While aggressive trading may generate short-term revenue, it ultimately harms users and reduces long-term customer trust.

“It’s in a platform’s best interest to get customers to trade less, not more,” he said, reiterating Zerodha’s long-standing stance on promoting sustainability rather than speculation.

Kamath concluded that slow, deliberate participation is safer for most retail traders and prevents common pitfalls associated with overtrading.