At a wedding in December your cousin, who is twenty-nine and does something in logistics, spends twenty minutes telling you about his week. He made ₹80,000 on Thursday. He uses the word “setup” four times and the word “account” never. He does not tell you what the year looks like and you do not ask, because it is a wedding. On the way to the car his father takes your elbow and asks, quietly, whether this is a serious thing or a normal thing. You know the answer. You also know that nothing you say tonight will change anything, and that is the actual problem this lesson is about.
Every other lesson in this track has assumed you are the decision-maker. Here you are not. You have information, no authority, and a relationship that will outlast the account. The instinct is to argue, because arguing is the thing available. Arguing is also the intervention with the worst record of the four or five things you could do, and understanding why is what makes the others usable.
Telling a young man who rides without a helmet that he could die achieves nothing, because he has heard it, he knows it, and he has arrived home safely four hundred times, which is the evidence his brain is actually weighing. What sometimes works is smaller and stranger: a helmet that is already on the bike, a rule about a particular road, a friend who will not sit behind him without one.
Nobody trading a leveraged position is short of the information that most people lose. It is on the regulator’s website, in every newspaper and frequently in the broker’s own disclaimers. Producing more of it is producing more of the thing that has already failed. What moves are structures, not sentences.
The one sign worth watching for
You cannot assess somebody else’s trading from their stories, because stories are selected. What you can assess is size, and size answers a question the stories do not. Loss chasing is the specific pattern in which position size goes up after a loss rather than down — and it matters because it reveals that the objective has silently changed. The person is no longer trying to make money from an opportunity. They are trying to get back to a number, and the number now decides the size. This is the same mechanism as the deadline in the first lesson of this module, arriving from a different direction.
| What you might say | What it actually produces | Why |
|---|---|---|
| “Most people lose money doing this” | A defence, and the end of the conversation | It is a claim about a population and he is an individual with four hundred safe rides. He will answer with his best week and both of you will have wasted the evening |
| “You are being an idiot about this” | A guarantee that you are not told next time | The most valuable thing you have here is being the person he rings on the bad day. Contempt spends that, and it does not buy anything |
| “How much of it is borrowed?” | A factual answer, or a very informative refusal to answer | It is checkable, it is not a judgement, and the answer determines whether this is a bad year or a bad decade. Debt is what makes losses outlive the trading |
| “What was your worst week this year?” | A shift from the highlight reel to the distribution | He has told you about Thursday. He has an answer to this and he has probably not said it out loud to anybody, and saying it out loud is itself the intervention |
| “Can we look at the full year on the P&L page together?” | The record instead of the memory | Broker platforms produce a realised profit and loss statement for the year. Memory of trading is famously and systematically flattering; the statement is not, and he has very likely never opened it |
Why the facts do not work
- The wins are vivid and the record is not. Thursday is a story with a number in it. The eleven losing weeks are an absence, and absences are not remembered as events. This is not stupidity; it is how memory is built.
- Every fact you supply is read through what he already believes. Confirmation bias does not reject contrary evidence, which would at least be visible — it accepts it and finds a reason it does not apply here. “Most people lose” becomes “most people have no system”.
- Being told is itself evidence of being underestimated. A lecture from a relative is a status transaction as much as an informational one, and the response is generated by the status part.
- The activity is doing a job. Sometimes it is money. Often it is boredom, a salary that is not moving, a comparison with a friend, or something at home. An argument aimed at the money does not touch the job the activity is doing, which is why it changes nothing.
- Anything that looks like withdrawal of the relationship raises the stakes. A person who feels judged by everybody around them and has an account that is down has a strong incentive to make it back before anybody finds out — which is the first lesson of this module, and you have just helped create it.
What you can actually change
The realistic objective is not that he stops. It is that the damage is bounded, the debt does not compound, and the household is not taken down with the account. That is a harm reduction frame, and people resist it because it feels like conceding. It is not conceding; it is choosing the outcome that is available over the one that is not.
- 1Stop funding it, if you are funding it
This is first because it is the only item entirely within your control and the only one that works without his agreement. Any further money you provide is a decision you are taking, not one he is. That includes money lent for something else that frees up money for this, which is most family lending.
- 2Get the household’s essentials out of reach
The rent, the school fee, the term insurance premium and the health cover should not run from an account that can be swept into margin, and should not depend on a month being profitable. A lapsed term policy is the most expensive thing that can quietly happen in this whole situation, on a due date nobody was watching. A lapse can usually be put right inside a revival window the policy specifies, on the insurer’s terms and often with fresh evidence of health — but there is no cover at all in the meantime, and health evidence is exactly what the person who has just needed the policy can no longer supply.
- 3Get the borrowing named, listed and totalled
On one sheet: every loan, the outstanding, the rate and the EMI. Not to shame anybody — to convert a vague dread into a number that can be worked on. Trading losses stop when trading stops; debt does not, and it is the debt that turns a bad year into a decade.
- 4Ask for the year, from the platform, not from memory
Sit with him while he opens the realised profit and loss for the financial year, and add the brokerage, the exchange and regulatory charges and the securities transaction tax that the same page reports. Say nothing while he reads it. There is a reasonable chance nobody has ever done this with him and a reasonable chance the number is not the one he is carrying in his head.
- 5Agree one number that stops it, and one other person who is told
A written figure — a total loss, or a total borrowing — at which he stops, and the name of somebody else who is informed when it is reached. A limit known to only one person is not a limit, it is an intention. This is the part that most often gets agreed and then quietly dropped, which is exactly why the second person matters.
“Four lakh, for two weeks”
The same cousin asks for ₹4 lakh for a fortnight and does not say what it is for. From the last six months you are fairly sure you know. You can afford it. He has never asked you for money before.
Which observation most reliably indicates that somebody has stopped trying to make money and started trying to get back to level?
Shaadi mein chachera bhai bata raha hai ki Thursday ko ₹80,000 bane. Saal ka kya hua, woh nahi bataya. Aap "sab log paisa gawaate hain" bologe, woh apna best hafta sunayega, aur baat wahin khatam. Usse jaankari ki kami nahi hai — woh sab likha hua hai. Do sawaal kaam ke hain: "kitna udhaar ka hai?" aur "is saal ka sabse bura hafta kaunsa tha?" Aur ek nishani sabse pakki hai — nuksaan ke baad position chhoti nahi, badi ho rahi ho, matlab ab kamaane ki nahi, barabar hone ki koshish chal rahi hai. Aur haan: uska loan chukaakar bina kuch badle, aapne position band nahi ki — khareed li.
- He is not short of the information that most traders lose, so supplying more of it is repeating the thing that has already failed.
- Size rising after a loss is the reliable sign that the objective has changed from making money to getting back to level.
- Price every intervention against remaining the person he rings on the bad day; that call is where the real work happens.
- Aim at bounded damage: stop funding it, move the household essentials out of reach, and get the borrowing listed and totalled.
- Clearing somebody’s trading debt without a structural change buys the position rather than closing it.
Mark it done to track your progress through the curriculum.
Common questions
Short, direct answers to what people ask about this topic.
- what is loss chasing in trading
- Loss chasing is the pattern in which position size goes up after a loss rather than down. It matters because it exposes a change of objective: the person is no longer trying to make money from an opportunity, they are trying to get back to a number, and the shortfall has started setting the size. An opportunity does not become more attractive because you are behind, so if the position got bigger, something other than the opportunity chose the size.
- position size going up after a loss rather than down is a sign that
- The objective has shifted from making money to getting back to level, with the shortfall rather than the opportunity deciding how much is risked. It is the most reliable single thing you can observe from outside, because a run of losing weeks or one unusually large loss happens to everybody who trades and reveals nothing about intent. It is also checkable by simply asking, where somebody’s reasoning is not.
- my cousin is losing money trading options what can I do
- Very little through argument and a fair amount through structure. He is not short of the information that most derivative traders lose money, so supplying more of it repeats the thing that has already failed; the workable aim is bounded damage. Stop funding it if you are funding it, get the rent, school fees and insurance premiums out of any account that can be swept into margin, and get every loan listed with its outstanding, rate and instalment on one sheet. Price each move against remaining the person he rings on the bad day, because that call is the only moment anything you say is actually heard.
- how many individual traders lose money in equity derivatives in India
- A large majority. India’s market regulator has published studies of individual traders in the equity derivative segment more than once, and each has found that most of them lost money over the periods examined, with the losses concentrated rather than spread evenly. The exact proportion differs by study and by period, so it is worth reading the regulator’s own published paper instead of a figure quoted second-hand — the point for a family is that this is measured and public rather than folk belief.
- should I lend money to a relative to clear his trading losses
- Paying off somebody’s trading debt without any structural change does not close the position — it buys it. The loans go, the behaviour stays, the account has fresh capacity, and you are now inside the situation with more exposure and no more authority than before. If money is going to be given at all, it goes to a specific creditor directly, after every loan has been listed and totalled, and alongside a written figure at which the trading stops that a second person also knows about.