The irony of predicting markets: Nithin Kamath flags an expensive mistake traders can’t do without

Zerodha co-founder Nithin Kamath has said that one of the most common and expensive mistakes traders make is believing they can predict the market, even though most know they cannot. Sharing insights from a new podcast episode on Zerodha’s YouTube channel, Kamath said there is a clear gap between “knowing” and “doing” when it comes to trading behaviour.

Kamath’s comments came as he highlighted a conversation between SEBI-registered research analyst Sandeep Rao and veteran trader Tom Sosnoff, the co-founder of Thinkorswim and tastytrade.

Sosnoff, considered one of the most influential derivatives traders in the US, reflected on his decades-long career and how long it took him to understand that experience doesn’t necessarily translate into predictive power.

Sosnoff said he once believed he had an edge because he had spent more than 40 years tracking the markets closely, watching “more ticks in the S&P” than almost anyone else. But he eventually realised that this did not give him any real advantage in forecasting the next market move.

“It took me a really long time to appreciate that I don’t have any real edge over anyone else when it comes to predicting what happens next,” he said.

He added that while experience offers familiarity and comfort—having “seen everything once or twice”—it still does not translate into an ability to consistently predict price movements.According to him, traders often overestimate the value of experience because of ego or the assumption that time spent watching markets must automatically result in superior foresight.Kamath said Sosnoff’s remarks underline a pattern visible in retail trading, where individuals frequently trade on conviction rather than probability or risk management. The belief that market moves can be accurately forecast leads to large losses, especially during periods of high volatility.

The conversation also explores other themes around trading psychology, market structure, and why most retail traders struggle to stay profitable over long periods. Kamath said the episode offers meaningful takeaways for new and experienced market participants, especially at a time when more first-time investors are entering equities and derivatives.

The full discussion is available on Zerodha’s YouTube channel.

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