Expert view: Trading can be risky for retail investors who lack a disciplined strategy and robust risk management. Today, traders have access to an abundance of information- from charts, technical indicators, options data, and social media to real-time news. Yet, most retail traders continue to incur losses.
Shai Coelho, Director of Vtrender Technologies Private Limited, explains why most retail traders struggle to make consistent profits, the role of artificial intelligence (AI) in trading, and more. Edited excerpts:
What role can AI play in trading over the next five years?
AI will be useful, but not as a replacement for judgment. It can process large amounts of data, scan patterns, summarise conditions, test ideas and reduce manual workload.
On my own desk, it already does some of this — and it has not once told me where value will be accepted. Trading is not only pattern recognition; it involves context, risk, execution and knowing when not to act.
AI will improve the workflow around trading. The decision still needs market understanding and discipline. Tools improve the desk. They do not replace the trader.
Have Indian markets become increasingly derivatives-driven? How has this changed the way traders should analyse markets?
Yes. NSE has been the world’s largest derivatives exchange by contracts traded since 2019, and the weekly options cycle sits at the centre of that.
Earlier, price and volume were enough to form a working view. Today, that is incomplete.
Options positioning, open interest, expiry behaviour, volatility, and order flow all shape how the price moves intraday.
Traders now need to understand participation, not just price. The market is still an auction – the derivatives layer has made that auction faster, more compressed, and more sensitive to positioning.
Why do most retail traders fail to profit despite having access to more market information than ever before?
Information has increased; market understanding has not kept the same pace. Traders today have charts, indicators, options data, social feeds and news, but no filter. More information often creates more noise.
The missing link is structure. A trader needs to know what matters in the current context: where value is building, where participation is changing, and whether a move is being accepted or rejected. Data without context does not create an edge.
How important are ‘Market Profile’ and ‘Orderflow’ in today’s market environment?
They matter because they let a trader read the auction instead of only watching the price.
Market Profile shows where value is being accepted or rejected over time. Orderflow shows how participation is behaving at specific prices.
Together, they turn movement into context. I do not predict where markets will go. I read what participants are doing right now – and these two methods are how that reading is done.
In faster markets, especially around expiry, that context is the difference between movement and meaning.
Has the rise of weekly options changed price discovery in India?
Yes. Weekly options have compressed time, increased positioning sensitivity, and made expiry behaviour a routine feature rather than a monthly event.
On many expiry days, you can watch the session build narrow value early and resolve late – structure that used to appear once a month now appears every week.
Price movement is shaped not just by buying and selling in the underlying, but by options positioning, hedging flows, open interest shifts and volatility changes.
Price discovery is still present; it now operates inside a stronger derivatives framework.
What are the biggest mistakes traders continue to make in your view?
Trying to predict before observing. Many traders start with a view and then search for data that supports it.
The market has to be read the other way: first observe the structure, then understand participation, then decide if there is a trade.
A second mistake is treating every move as meaningful – not every price move has acceptance behind it.
And in a derivatives-driven market, ignoring options positioning and expiry behaviour is a serious gap.
How should traders distinguish between market noise and meaningful market information?
Noise moves price without changing structure. Meaningful information changes acceptance, value, or participation.
The questions are simple: Is value moving? Is the price being accepted at new levels? Is order flow supporting the move? Is positioning changing with it? Does the move hold beyond the first reaction?
Market Profile and Orderflow help because they separate movement from acceptance. A fast move is not automatically meaningful. The structure after the move tells the real story.
You have authored a book on trading. What key gap in trader education have you tried to address through your book?
The gap between chart watching and market reading. Traders are taught indicators, setups and patterns, but not how markets auction, how value is built, or how participation leaves evidence.
Power Trading with MarketProfile and Orderflow came from my desk, not from theory — it explains both methods in the context of real Indian market behaviour, for traders who want to move beyond prediction and learn to read structure.
The second edition is in production now, updated for how the market currently trades.
Disclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
