Zerodha founder and CEO Nithin Kamath has identified a critical issue that plagues many traders and offered a practical solution through his platform's innovative feature. The problem of over-trading and revenge trading, which often follows both successful and unsuccessful trades, can now be controlled using Zerodha's Kill Switch tool.
The Psychology Behind Trading Mistakes
In a detailed discussion on social media platform X, Kamath explained that over-trading and revenge trading represent the most common errors he has observed throughout his career as both a trader and brokerage owner. He emphasized that sometimes the most profitable decision is refusing to trade at all, a concept many investors struggle to implement.
"The other common trading mistake I have seen over and over again in all my years of being a trader and running a brokerage is over-trading and revenge trading," Kamath wrote. "Sometimes, the best trade is the one you don't take. This is why we launched Kill Switch."
Real Users Validate the Feature's Effectiveness
The Zerodha CEO's comments came in response to positive feedback from platform users who have successfully utilized the Kill Switch feature. One user named NikNifty shared his experience of booking profits within 15 minutes and immediately activating the Kill Switch to prevent overconfident subsequent trades.
"Booked profit in 15 minutes. Turned on Zerodha's kill switch after that," the user posted. "Because my biggest enemy after a winning trade is me with overconfidence + a buy button. Thank you Zerodha for protecting me from myself."
Another user, Gaurav Chaudhury, described the feature as therapeutic for traders who confuse temporary market movements with personal trading genius. "Honestly, the hardest part of trading isn't the market. It's fighting the version of myself that thinks one green candle means I'm the next Paul Tudor Jones," he noted.
How Zerodha's Kill Switch Actually Works
The Kill Switch feature provides traders with a self-imposed cooling-off period by allowing them to temporarily disable trading capabilities. Here's how investors can activate this protective mechanism:
To disable trading segments on the Kite app:
- Tap on your user ID
- Select Profile from the options
- Choose Segments
- Toggle the switch for the segment you wish to disable
- Confirm by tapping Continue
The system processes the disable request within approximately five minutes. Before initiating this feature, users must ensure they have no pending orders or open positions in the segment they plan to disable.
Important considerations when using Kill Switch:
- Once disabled, a segment cannot be reactivated for 12 hours
- The reactivation timing follows the 24-hour clock format
- Good Till Triggered (GTT) orders, basket orders, and SIPs triggered after disablement will be rejected
- Account maintenance charges continue despite segment disablement
To reactivate a trading segment:
Traders need to visit console.zerodha.com/account/segment-activation, toggle the segment switch, verify identity through OTP sent to registered email or mobile number, and complete the verification process. Trading can resume immediately after successful reactivation.
A Behavioral Finance Solution for Modern Traders
Zerodha's Kill Switch represents more than just a technical feature—it addresses fundamental behavioral finance challenges that affect traders worldwide. By providing a mechanism that enforces discipline, the platform helps investors avoid emotional decision-making that often leads to significant financial losses.
Nithin Kamath's insight into trader psychology and his company's implementation of this practical solution demonstrates how fintech platforms are evolving beyond mere transaction facilitation to providing comprehensive financial wellness tools.
