How Much Money Needed to Start Day Trading in India?


According to Live Mint, out of the total population exceeding 1 billion, India had just about 3.23 cr registered investors. Fortunately, since Demat account is now a must to trade on any of the exchanges, this number can safely be termed as accurate.

Another survey conducted by The Economic Times revealed that while 83.4% preferred to invest directly in Stocks, just 14.6% preferred the day-trading route. An average investor is generally very risk averse. He normally does not venture into intraday trading. However this lack of interest is more due to the lack of awareness of the investment process than the process itself.

One of the foremost and the biggest hurdles that faces a newbie intraday investor is how much money is needed to start day trading in India?

Well, if we have to answer the question in one sentence, then here it goes – There is no minimum amount that is needed to start day trading in India.

However, more than the minimum capital, an investor should focus on other things that will impact the investment performance for the day. Real Stock Ideas is one of the foremost investment advisors and recommends the following things that an investor should focus on before deciding to trade intra-day.

  • Know the intra-day trade basic first: in Intra day trading, one has to square off the position before the close of the trading day. Hence, if you have purchased something, it has to be compulsorily cleared that day itself.
  • Focus on highly liquid stocks: If you are a novice to intra-day trade, then you should also begin your learning by trading in highly liquid stocks.
  • Focus on reasonably volatile stocks only. Since, your profit/loss depends solely on the movement of the stock prices, the stocks chosen should be volatile. However, too much volatility is also risky.
  • Focus on sectors: As a part of your homework, focus on more than one sector. This helps to spread the risk in case a particular sector performs badly that day.
  • Create a watch list: As a part of preparation, always have a watch list of stocks that you intend to invest.
  • Look at the stock movement history: By collecting the historical data on price movement of a particular scrip, on can plot a price trend which comes in handy while intra-day trading.
  • Focus on percentage and not value: While trading in intra-day, one should always focus on percentage profit/loss rather than on value of the profit/loss. Percentage is a right indicator of your performance.
  • Choose the right broker and plan: Remember brokerage is a cost that has to be deducted/added from the profit/loss made respectively. Hence, choose a broker or a plan that has the least cost.
  • Remember to plough back the profit made: Always plough back the profits made in the previous session by reinvesting it. This will increase the investable capital an increase value returns in the long run.
  • Always start small: Till the time you are learning the tricks of the trade, always start with the lowest allowed value. This will help you minimise your loses in the learning period.
  • Think of failure as a training session: If your initial few session result in losses, think of it as the cost of learning. Analyse your performance for flaws and then re-invest. If you lose your steam at this juncture, you will never return.
  • Know when to get out: If your initial few trades are successful, do not get over overconfident. The stock market is highly unpredictable in nature. hence, if you have surpassed your profit targets, simply walk out. Remember, Greed it the biggest party spoiler for intraday traders.
  • Knowledge is power: A wise man once said “Knowledge is power”. It is very true for intraday trades. Keep your eyes and ears open for the likely news in the market that will cause movement in stocks. The earlier you know it, the better for you.
  • Stick to one first: In the initial days when you are learning, stick to one variety of trade, e.g. BSE, NSE, S&P 500, blue chips etc. Learn the trade for one first before opening another front.
  • Be realistic while investing: It is not how much you invest, it is how you invest that is important. So always be realistic while choosing the investment amount. Remember the risk is directly proportional to the invested amount. So always start small.
  • Do not trade for the first 45 minutes: It is often said that the scrips are in a highly volatile state in the first 30-45 minutes of the day. Thereafter they move an a particular direction. So unless you are adept in knowing this beforehand, choose to hold your horses for the first 45 minutes. You may not earn handsomely, but will not lose for sure.
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