Twenty two trades in one morning. Lots of confidence. Here is where the money goes, and what a boring index fund does instead.
Step 1 of 7 · Hook
The trading diary
The Broke Squad
3 members
Dhvani
day 1. up ₹300. i am basically a genius 😍
Mon 10:15
Tanishq
how many trades did you do
Mon 10:16
Dhvani
22
Mon 10:16
Tanishq
22?? in one morning?? 😭
Mon 10:17
Dhvani
day 3. down ₹900. it is fine. i will win it back
Wed 2:40
Nemi
That is called revenge trading, Dhvani. It comes from feelings, not facts.
Wed 2:41
Dhvani
day 5. down ₹2,100. the market is rigged 😭
Fri 3:31
Nemi
I am not judging. Let us look at the bill together. Here is the real question: why do most day traders lose, and what does a boring index fund do instead?
Fri 3:32
Step 2 of 7 · Guess
Guess first
SEBI is the group that watches over India's stock market. It studied small investors who trade in the fastest, riskiest part of the market. These are trades that bet on where prices go next.
Out of every 10 of them, how many ended up losing money?
Yes. SEBI studies found roughly 9 out of 10 lost money. Only about 1 in 10 came out ahead. Let us see where the money goes.
Step 3 of 7 · Build
The bill nobody sees
Day trading means buying and selling on the same day, trying to catch small price moves.
Say you trade with ₹10,000. In one month you make 20 trades. Every trade has small costs, and they add up fast. Tap each cost to add it to the bill.
The costs here are made up so the maths stays easy. Real ones vary by broker, but they always exist.
Costs in one month
Share of your ₹10,000
Left if you only break even
Full bar is your whole ₹10,000. The red part is eaten by costs.
Now add the other two costs.
Step 4 of 7 · Concept
The boring alternative
A fund is a shared pot. Many people put money in, and it buys lots of things together. An index fund buys all the companies in an index, like the Nifty scoreboard from Chapter 3. One unit gives you a tiny piece of every one of them.
Tap to compare the two.
Day trading
The goal
Beat the market by picking the right moment
Who is on the other side
Professionals with faster computers and years of practice
Costs
A small toll on every single trade
Your time
Every minute the market is open
Index fund
The goal
Grow along with the whole market
Who is on the other side
Nobody. You are not trying to outsmart anyone.
Costs
A tiny yearly fee. Buy once, and you pay very little after that.
Your time
A few minutes a month
An index fund goes down when the market goes down. It is not a rocket. It just avoids the tolls.
Step 5 of 7 · Why it matters
Watch the tolls pile up
Both start with ₹1,00,000. Pretend the trader has no skill and no bad luck, so they break even before costs. But costs eat 1% of the money every month. The fund is bought once and left alone. Drag the months, then pick what the fund does each year. These are made up scenarios.
Drag the slider
Each year, the fund…
Day trading, after costs₹88,638
Index fund₹1,10,000
Costs alone took ₹11,362 from the trader without a single wrong call. The fund ended ₹21,362 ahead.
Step 6 of 7 · Before and after
Same money. Two weeks.
Tap to see each way.
Trades all day
Trades
22 in one day
After a loss
Trades again to win it back. This is called revenge trading.
Screen time
Every minute of market hours
Result
Costs and losses pile up, and it is tiring
Buys once a month
Trades
One small purchase a month
After a loss
Does nothing. The plan does not change.
Screen time
A few minutes a month
Result
Few tolls, no drama, and calm sleep
Tanishq
so the boring one wins?
Sat 11:02
Nemi
Boring is not the goal. Fewer tolls is.
Sat 11:02
Dhvani
i want my ₹1,200 back 😭
Sat 11:03
Nemi
I know it stings. Next time we decide with a plan, not a feeling.
Sat 11:03
Tanishq
a plan and a feeling. i need both
Sat 11:04
Step 7 of 7 · Answer
Last one. Why do most day traders lose?
Yes. Costs are certain, profits are not, and the other side is often a professional.
Every trade pays a toll. Fewer trades, fewer tolls.Costs are certain. Profits are not. Do not bet against the toll booth.
Next chapter
IPO: what are you actually buying?
A company is selling its shares to the public for the first time, and everyone wants to be first in line. Before you join, learn what is on offer.
IAMB explains money basics. This is not advice to buy or sell anything. All costs, prices and returns here are made up so the maths stays simple.
Why this topic: SEBI studies found about 9 out of 10 individual traders in equity futures and options lost money. See the SEBI press release.
Purvang Gandhi A California-based travel writer, lover of food, oceans, and nature.
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