As India’s retail investor base grows exponentially, now exceeding 200 million, the rise of online trading has brought both opportunities and risks. While more people are actively participating in the stock market, many traders, particularly beginners, are often unprepared to handle the complexities and volatility of day trading, Futures & Options (F&O), and other high-risk strategies. Studies show that nearly 70% of new traders experience losses, often because of impulsive decisions, overconfidence, and a lack of a solid trading plan.
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To address these challenges, Groww and CNBC-TV18 have launched the ‘Growth Code’ Campaign, aimed at empowering traders, especially the younger demographic, with the knowledge and strategies needed for responsible trading. By focusing on informed decision-making, risk management, and long-term growth, the campaign seeks to shift traders away from the speculative frenzy and impulsive behaviors that dominate social media and online trading forums.
The dangers of impulsive trading & speculation
The allure of quick profits is one of the most dangerous traps in trading. Many new traders, influenced by social media and influencers, believe that they can outsmart the market and generate immediate returns. This overconfidence often leads them to engage in day trading, F&O trading, and other speculative strategies without fully understanding the risks involved.
When these traders see a few initial successes, they often mistake luck for skill, which can lead to a dangerous cycle of high-stakes, emotional trading. This overconfidence can cause traders to over-leverage their positions, chase short-term market trends, and disregard crucial risk management principles.
The rise of herd mentality on social media platforms further compounds the problem. As retail traders flock to trending stocks or trading strategies, they often ignore the underlying market fundamentals. The constant barrage of “get-rich-quick” stories from influencers amplifies this mindset, creating an environment where traders act based on impulse rather than research or analysis.
The need for responsible trading
In the fast-paced world of trading, the importance of right knowledge cannot be overstated. For many traders, especially those new to the markets, the temptation to act impulsively based on a fear of missing out (FOMO) or the pressure to keep up with peers can cloud judgment. Without understanding the underlying principles of trading, such as risk management, technical analysis, and position sizing, traders are more likely to make emotional decisions that lead t