By Irshad Mushtaq
For a household in Kashmir, investment money may represent years of work—a shopkeeper’s savings, a teacher’s salary, a business owner’s surplus or money reserved for a child’s education.
A trading app can put that money within seconds of a market transaction. Access is valuable. But when convenience becomes compulsion, the same technology can make it easier to take risks that were never part of the family’s financial plan.
The concern is not that every trader loses, every app is harmful or every independent investor needs someone else to make decisions. The concern is what happens when frequent trading, leverage, emotional reactions and accumulated costs operate together.
In that combination, low brokerage can offer a small saving while excessive activity creates a much larger financial problem.
THE OFFICIAL FIGURES DESERVE ATTENTION
SEBI’s study of individual traders in equity derivatives reported that 87.7% incurred net losses in FY2025–26. Across FY2024–25 and FY2025–26 combined, 111.6 lakh of 122.6 lakh individual traders—approximately 91%—were loss-makers. These figures concern equity derivatives, not every person investing in shares or mutual funds.
A separate SEBI study found that 71% of individual intraday traders in the equity cash segment lost money in FY2022–23. Among traders in the highest turnover and trading-frequency categories, the proportion of loss-makers reached 81%.
These are national findings, not Kashmir-specific statistics. They do not establish the outcome of every individual trader. But they challenge a dangerous assumption: that more market activity necessarily means more income.
LOW BROKERAGE IS NOT THE SAME AS LOW COST
Competitive brokerage can reduce transaction expenses. That is a genuine benefit when a transaction is necessary and appropriate.
The problem begins when the low charge becomes the reason for placing another trade.
A trader may think, “The brokerage is small, so one more trade will not matter.” Repeated across a day, a week or a month, that reasoning can produce substantial turnover without a stronger investment case.
SEBI’s cash-intraday study found that loss-makers incurred trading costs equivalent to an additional 57% of their trading losses in FY2022–23. The costs made an already negative result worse.
The relevant question is therefore not, “How little does this broker charge?”
It is, “What is my actual result after every transaction and every applicable cost?”
TAXES, CHARGES AND EXECUTION COSTS MUST BE UNDERSTOOD
Brokerage is only one part of trading costs. Investors should also examine the applicable statutory charges, transaction charges and the difference between the price expected and the price actually obtained.
These should not all be casually described as “income tax.” Transaction-related levies and income-tax obligations are different matters. Tax treatment also depends on the transaction and the investor’s circumstances.
For anyone trading frequently, the broker’s contract notes, ledger and annual statements deserve more attention than a dashboard showing selected profitable trades. SEBI’s research demonstrates why evaluating outcomes after costs is essential.
A qualified tax professional can help distinguish turnover, profit, loss, expenses and applicable reporting obligations.
WHEN AN APP ENCOURAGES ACTIVITY, THE USER NEEDS BOUNDARIES
Modern trading platforms make information and execution readily available. But certain design features can also encourage users to return, react and trade more frequently.
The UK’s Financial Conduct Authority tested trading-app features in an experiment involving more than 9,000 consumers. Push notifications increased trading frequency by 11%, while points and prize-draw features increased it by 12%. Some features also increased risky trading.
This does not mean every notification is harmful or that an app literally controls a person’s mind. It means design can influence behaviour.
A flashing price is information—not an instruction. A notification is an invitation to look—not an obligation to act.
For a person trying to manage work, business and family responsibilities, recognising that distinction matters.
THE DANGEROUS SHIFT FROM A PLAN TO A RECOVERY MISSION
Consider a hypothetical trader who loses money in the morning. Instead of reviewing the original decision, the trader increases the next position to recover quickly.
The next trade is no longer judged independently. It carries the emotional burden of the previous loss.
If another loss follows, the pressure can increase: more trades, larger exposure and less willingness to stop.
This is an illustration, not a diagnosis of every losing trader. Market losses can occur even when a plan is sensible. The warning sign is when the plan is abandoned because the trader feels unable to finish the day in loss.
The market has no obligation to provide a recovery opportunity before the session ends.
LEVERAGE CAN TURN A SMALL MARKET MOVE INTO A LARGE PERSONAL LOSS
Leverage allows exposure greater than the capital supporting it. That can magnify gains, but it also magnifies losses.
Suppose ₹1 lakh supports a simple linear exposure of ₹5 lakh. A 5% adverse movement on that exposure produces a ₹25,000 loss—25% of the starting capital—before costs.
This is a simplified illustration. Actual outcomes depend on the instrument, position structure and execution.
The essential distinction is between the money required to enter a position and the money that can be lost. Margin should never be treated as a certificate that a position is affordable.
SEBI’s findings on widespread derivatives losses make careful assessment of exposure especially important.
TWENTY YEARS IN THE MARKET DOES NOT REMOVE RISK
Experience can improve judgment. It does not provide immunity from changing conditions, overconfidence or poor position sizing.
However, saying that every person with twenty years of experience will eventually lose heavily would also be incorrect.
The useful distinction is between years of participation and evidence of a disciplined process.
An experienced trader should still be able to explain:
Returns after all costs.
The capital required to generate those returns.
The largest fall in account value.
Whether results depend on a few exceptional trades.
Whether losses remained within predetermined limits.
SEBI’s derivatives research found that average net losses increased substantially across higher-turnover categories. High turnover is therefore not, by itself, evidence of expertise.
GUIDANCE SHOULD REDUCE CONFUSION—NOT INCREASE TURNOVER
Independent investing is not automatically reckless. Many investors can make informed decisions without frequent assistance.
Equally, another person’s involvement does not guarantee safety. A broker, an Authorised Person and an investment adviser perform different roles; investors should verify the person’s status and the scope of services rather than treating these descriptions as interchangeable.
Useful guidance should explain risks, costs, suitability and conflicts. It should not depend on promises of assured profits or pressure to recover losses through more trading.
The purpose of assistance should be better decisions—not merely more transactions.
A PRACTICAL DISCIPLINE FOR KASHMIRI HOUSEHOLDS
The following safeguards are worth considering before placing the next trade:
Keep money needed for education, essential household expenses and emergencies outside speculative trading.
Do not borrow merely to increase market exposure.
Separate long-term investments from a clearly limited trading allocation.
Turn off unnecessary promotional and market notifications.
Write down position size, exit conditions and the maximum acceptable loss before entering.
Establish a loss limit and stop when it is reached.
Review complete statements rather than isolated winning screenshots.
Pause if trading repeatedly interferes with sleep, work, relationships or household finances.
These are proposed safeguards, not guarantees of profitability. Their purpose is to prevent a financial activity from taking control of the family’s priorities.
CONCLUSION: YOUR SAVINGS DESERVE MORE THAN AN IMPULSE
For Kashmir’s households, financial-market access should be an opportunity to build knowledge and long-term security—not pressure to remain constantly active.
The evidence does not say that every trader fails. It does show that losses are widespread in intraday and derivatives trading, and that costs can deepen those losses.
Low brokerage is useful. Easy execution is convenient. Experience can help. Guidance can clarify. None replaces risk control.
Before pressing “buy” or “sell,” ask whether the decision serves a financial goal—or merely answers an emotion.
Your savings represent days of work that cannot be recovered with another click. Protecting them matters more than proving you can win the next trade.
Investor education only. Trading involves risk, and no platform, intermediary or strategy guarantees profits. The cited trading studies are national findings, not estimates specifically for Jammu and Kashmir.
Irshad Mushtaq is a Srinagar-based financial educator, investment communicator and columnist associated with M. I Securities. He writes on personal finance, mutual funds, ETFs, investor protection and Shariah-compliant investing, helping people understand financial decisions in simple, practical language.
