According to Associated Chambers of Commerce and Industry of India (ASSOCHAM), retail investor participation has surged significantly, with the number of unique investors on the National Stock Exchange of India increasing 3.6 times from 3.11 crore in March 2020 to 11.2 crore in February 2025. On the latest count, the number stands well over 25.0 crore.
This rapid expansion signals a structural shift in India’s financial landscape. However, market participation has grown faster than investor preparedness, widening the gap between access and informed decision making.
Terms such as stocks, shares, scripts, trading, indices and derivatives have increasingly become part of conversations among those actively interested in the capital market, reflecting improved financial awareness. Yet awareness alone does not translate into preparedness.
While participation has broadened meaningfully, trading approaches still differ widely, with many market participants drawing heavily from shared insights, market narratives and peer level ideas exchange. Without a clearly defined structure for decision making and risk management, trading outcomes can become uneven, particularly across volatile phases.
Why Skill, Structure, and Preparation Are Non Negotiable in Trading
Market activity often increases around weekly or monthly expiries, driven by the appeal of leverage and the potential for faster outcomes. In segments like derivatives, risks are not always visible. For instance, the value of options can decline with the passage of time even if the market does not move significantly.
Thus, volatility can alter risk exposure rapidly and margin requirements may rise during stress, forcing exits at unfavourable levels.
These structural realities demand far more than occasional engagement. Trading improves through consistent preparation, disciplined review and reflection on both profits and losses. Intermittent participation disrupts the on task learning process.
Without structured feedback, losses are attributed to bad luck and gains to instinct, making it difficult to build repeatable decision making frameworks. As discipline weakens, risk taking tends to increase, particularly in volatile sessions.
Trading skills are developed progressively. It begins with practice based understanding of market structure and product mechanics and advances towards position sizing, probability assessment and emotional control.
Judgment is built through exposure to different market situations such as trends, ranges, volatility spikes and drawdowns. Such competence cannot be acquired through short form content or occasional engagement. It requires time, structured and immersive learning and rigorous assessment before meaningful capital is put at risk.
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Why Engagement and Commitment Matter in Trading
Engaging the markets part time is not inherently wrong. However, it aligns more closely with investing than trading.
Active trading requires continuous monitoring, real time risk management and ongoing evaluation. For individuals whose primary profession lies outside the markets, structured long term investing or professionally guided strategies may offer a more appropriate alignment between time commitment and financial goals.
Matching one’s participation style with preparedness and access to informed guidance can significantly improve outcomes as well as the right to win.
A call for professionalisation
In the pursuit of becoming Viksit Bharat, India needs healthier capital market participation. For this to happen meaningfully, trading must be repositioned not as a shortcut to becoming rich, but as a serious profession with defined pathways towards wealth creation.
Professionalisation means nurturing realistic expectations, undertaking structured learning and building rigorous risk discipline.
Strengthening this ecosystem requires structured curricula on risk and market mechanics, wider use of simulations before live exposure and a shift from tip driven behaviour to process driven decision making.
With expanding financial education and disciplined pathways, India can strengthen liquidity, improve capital formation and build a more resilient Viksit Bharat in the coming years.
(The author Milan Parikh is MD & Chairman at Jainam Broking Limited)
(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. These do not represent the views of The Economic Times)