Zerodha, India’s biggest brokerage firm, has come up with a new feature ‘Kill Switch’, a new nudge on its Kite app. This will let customers to take a break from trading and stop more than-trading. With its Nudge functionality, Zerodha has been like warnings and nudges into Kite, alerts that assistance clientele much better the odds of winning when trading. “When you’re in a drawdown while trading, the best thing to do is to take a break. Otherwise, the chances of you being irrational, taking large bets, overtrading & blowing up are high,” mentioned Nithin Kamath, Founder & CEO, Zerodha Online, in a tweet.
Kamath, in a post published on the Zerodha web page, mentioned when in a drawdown or producing losses, the typical quantity of trades are substantially larger than when producing income. Good traders either lower their trading size substantially or take a break from trading when in a drawdown. This is perhaps the only way to survive trading the markets in the extended run. Being aggressive or trading more when losing hardly ever ever performs out properly, he mentioned. “If you’re making losses, this new feature helps with your trading discipline and risk management by allowing you to instantly disable trading in one or more segments on Kite, forcing you to take a break from trading,” study element of the post.
Trading in a segment can be re-enabled only 12 hours soon after the segment is disabled. Currently, this function is manual, but the business is working on setting up the Kill Switch to be triggered automatically, based on a predefined loss or drawdown level fixed by a user. Apart from this, Zerodha is also working to let customers to define the maximum order and position sizes for each and every instrument as a percentage of the all round trading capital. “This is to help you avoid taking large positions due to anxiety induced by greed or fear when trading,” Kamath mentioned.
How to use Kill Switch feature
The Kill Switch feature will also assistance customers hunting to temporarily deactivate the trading account or distinct segments for any explanation. The customers of Zerodha will have to exit all open positions and cancel all open orders just before disabling a segment. Traders can use Kill Switch and deactivate trading by going to Console, then going to accounts section. In the last step, go to the segments tab and deactivate. While speaking about this feature, Kamath in a tweet mentioned: “I think taking a break when things aren’t going well can be super helpful in all aspects of life”.