The deep truth behind retail investors losing money in A-shares: four major structural disadvantages—understand why it’s always “seven losses, two flat, one win”

In the A-share market, “seven losses, two flat, one win” has long been an unchanging norm for many years. The vast majority of retail investors lose money consistently over the long term, and many people instinctively attribute the reason to having a bad mindset, trading too frequently, or not having good luck.
But the real market logic is far more brutal than individual issues: when retail investors lose money, it is never because they lack skills or mindset—it’s because they lose to an inherently unbalanced structural game.
From the moment retail investors enter the market, they find themselves in an environment where they are weak in every aspect: the system, tools, information, and even social standing. Today, let’s break down the core root causes of retail investors’ persistent losses from four fundamental dimensions.
The core original purpose of establishing A-shares is to provide financing channels for real companies, prioritizing serving companies’ development rather than creating returns for investors. This underlying positioning has shaped a rule system that naturally favors the financing side and weakens the investing side.
For a long time, the market has remained in a continuous “bleeding” state. Routine IPOs, corporate share placements (private placements), expansion of convertible bonds, and large shareholders’ unlock-and-sell reductions steadily siphon off large amounts of liquidity from the secondary market.
In contrast, on the investment return side, A-share listed companies overall show a low willingness to distribute dividends, making it almost impossible for ordinary retail investors to achieve steady value growth relying on dividends. As a result, the entire market turns into a zero-sum game—or even a negative-sum game: everyone can only make money from price swings and profit from the spread; if someone profits, someone else must be the one holding the losses, and retail investors naturally become the main group taking chips at high levels.
A-shares trading rules contain visibly unfair gaps.
Retail investors uniformly follow a T+1 trading system: shares bought on the day cannot be sold to correct mistakes. Once a negative surprise hits at the close or a “black swan” appears overnight, retail investors can only passively hold positions and absorb losses, with absolutely no room for self-rescue.
Meanwhile, large institutions can rely on their core holdings, securities lending tools, and block trades to carry out disguised intraday T+0 turnaround trades. With every market shake and fluctuation, institutions can repeatedly capture the spread, lowering their cost basis and continuously harvesting volatility profits.
Add the limit-up/limit-down board rules as well, and in extreme conditions it’s easy for liquidity to dry up. When a stock hits the daily limit-down, retail investors can’t place orders to escape; they can only watch a continuous decline. Institutions, however, have dedicated trading channels and block-trade exit options at discounted prices, allowing them to always complete stop-loss exits first.
For a long time in the past, A-shares also had an obvious “immortal bird” style market, where subpar junk companies repeatedly got traded and exploited through shell resources and reorganization arbitrage, lingering in the market for extended periods.
Ordinary retail investors lack professional screening ability, making them easily lured by theme-driven speculation and causing them to recklessly step into trouble-stock disasters.
Even if the registration-based system has been implemented and delisting standards were tightened significantly and delisting has gradually become more routine, the delisting consolidation period often begins with consecutive low-volume limit-down days. Small and medium retail investors do not have effective channels in advance for cutting losses, safeguarding rights, or hedging risk. Once they hit a delisting stock, their principal will most likely face severe shrinkage—or even go directly to zero.
The A-share SSE Composite Index uses free-float total market cap-weighted calculation, meaning it is deeply bound to traditional heavyweight stocks. This often leads to a disconnect where the index surges while individual stocks broadly fall. Retail investors watch the overall market look red-hot, but their own accounts keep drifting lower, completely missing out on the index’s gains.
Besides that, the friction costs created by high-frequency trading by retail investors—commissions, stamp duty, and so on—are long ignored hidden losses. #币圈#