Why 95% Traders Lose Money? (& how you can avoid) | Trading vs Investing

Can You Achieve Financial Freedom with Trading? (Investing vs Trading)
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Can trading actually give you financial freedom, or is long-term investing the real and proven path to building wealth?
In this video, we break down the complete truth behind Trading vs Investing and lessons from some of the most successful traders in history. If you are a beginner entering the stock market, this video may save you years of mistakes and a significant amount of money.

We begin with the common dream many new traders have: waking up late, placing trades for half an hour, making twenty to twenty-five thousand rupees a day, and enjoying the rest of the day. Many also imagine living a luxurious lifestyle like top trading influencers. This dream is what pushes most beginners into day trading without understanding the risks or the reality behind it.

However, even Nithin Kamath, founder of Zerodha, openly states that day trading is one of the toughest ways to make money on the planet. Yet, we often hear stories about people like Jim Simons, one of the greatest traders of all time, who compounded returns at nearly 66 percent annually for decades which is better than Warren Buffetts investing record. This creates confusion: some people become extremely rich from trading, while most people lose money. So who should you believe?

We then address the most important question: if most traders lose money, who is making the profit? Because in trading, for one person to win, another person must lose. Trading is a zero-sum game. There is no value creation happening. Traders only exchange money among themselves.

To answer this properly, we studied the world’s best trading books such as Trading in the Zone, Market Wizards, How to Day Trade for a Living, How to Make Money in Stocks, and The Man Who Solved the Market. We also analyzed the lives of top traders including Jim Simons, Richard Dennis, Paul Tudor Jones, and Ed Seykota.

Across all these world-class traders and books, a clear pattern appears: successful traders master three pillars of trading:

A Systematic Process – a mechanical, rule-based strategy tested and proven over thousands of trials.

Risk Management – protecting capital by cutting losses quickly and letting winners run.

Psychology – controlling emotions, following the system, and avoiding fear and greed.

For example, Richard Dennis became famous for turning four hundred dollars into two hundred million dollars by following a simple trend-following system. He even taught this system to a group called the “Turtles,” and they made over 175 million dollars by simply following his rules. But even Dennis himself suffered major losses during Black Monday because risk management failed.

Paul Tudor Jones made huge profits by predicting the 1987 crash, yet his win rate was only around 40 percent. He still made money because he managed risk better than others.

Ed Seykota built one of the first computerized trading systems and learned that even the best system fails when emotions interfere. His rule was simple: cut losses again and again.

Even with all this knowledge, trading remains extremely difficult because controlling emotions and maintaining discipline is the hardest part. This is why Nithin Kamath says most people should avoid day trading.

On the other hand, long-term investing does not require competing with other traders. When you invest for many years, you grow with the company. If a company builds new factories, launches new technology, improves production, increases market share, or creates better products, the value created naturally flows to long-term investors. Everyone can win together.

We also explain three types of investors:
Amateur Investors – People who simply invest a small amount every month through SIPs. Boring but extremely powerful over 10 to 15 years.
Intelligent Investors – Those who study company fundamentals like Warren Buffett and select stocks based on real business performance.
Pro Investors – Those who research deeply, understand industries, valuations, management quality, and buy stocks at the right price.
Long-term investing gives predictable, steady, and scalable growth without needing to sit in front of a screen or trade emotionally. Receive SMS online on sms24.me

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