How to Start Day Trading in India? - Step-by-Step Guide

trading-education | 18-12-25

Day trading in India has grown rapidly over the past decade as more people look for flexible income, technology-driven opportunities, and skill-based professions outside of traditional jobs. With modern trading apps, faster internet speeds, and easy digital onboarding, it has never been simpler to access any of the markets from anywhere in the country.

But simplicity of access does not guarantee success. Day trading requires discipline, strategy, risk control, and an understanding of India’s market structure and regulations. When done with the right preparation, it can become a structured, responsible, and rewarding activity for those who approach it with clarity rather than guesswork.

How to Start Day Trading in India?

Starting day trading in India is absolutely possible, and the steps are straightforward: open a brokerage account, understand how Indian markets work, build a trading strategy, control risk carefully, and comply with tax rules.

Profitability, however, depends on the trader’s dedication to learning, ability to manage losses, and consistency—not on shortcuts or predictions. This article breaks down the correct step-by-step path so new traders can begin with confidence and avoid the common mistakes that cause beginners to struggle.

Day Trading in India: Quick Comparison Table

1. Prepare the Essentials: Accounts, Tools & Education

Starting day trading in India begins with the basics: documentation, broker selection, and learning how the market functions.

A. Documents Required

To open a trading account, you need:

• PAN card
   
• Aadhaar linked to your mobile
   
• Bank proof (cancelled cheque or statement)
   
• Income proof (required if trading F&O)
   

Most brokers complete KYC within 10–30 minutes through e-signing and video verification.

B. Choose a Reliable Broker

For day trading, cost and speed matter more than research tools. Popular discount brokers include Zerodha, Groww, Upstox, Angel One, Dhan

They offer:

• Low brokerage (typically ₹20 per order)
   
• Fast execution
   
• Clean mobile and desktop platforms

While your primary trades will run through an Indian broker, some traders later explore prop firm evaluations to access larger trading capital once they build skill and confidence.

C. Understand Market Mechanics

Before placing any real trades, every beginner must understand how the Indian market actually works. These basics shape your timing, risk, and overall trading decisions.

Key points to learn:

• Market timings: The market runs from 9:15 AM to 3:30 PM.
   
• Opening volatility: Price swings are sharp at 9:15 AM, especially in the first 5–15 minutes.
   
• Auto square-off: Brokers close open MIS positions near the end of the day and may charge penalties.
   
• Order types: MIS is for intraday trading; CNC is for delivery-based investing.
   
• Leverage risks: Leverage increases buying power but magnifies losses just as quickly.

D. Practice With Simulated Trading

Before risking real money, it’s crucial to build confidence and muscle memory using a demo or simulated platform. This step prepares you for real market conditions without financial pressure.

Things to practice:

• Basic chart reading
   
• Identifying trends and momentum shifts
   
• Marking support and resistance levels
   
• Using stop losses and managing risk
  
   

A few weeks of solid practice helps eliminate emotional trading and sets the foundation for consistent decision-making.

“Day trading doesn’t reward those who rush in; it rewards those who prepare, practice, and execute with consistency.”

2. Build Your Strategy: What, When & How You Trade

A trading strategy answers three core questions:

What will you trade?

Highly liquid stocks like:

• Reliance
   
• HDFC Bank
   
• Infosys
   
• Tata Motors

These move cleanly and are suitable for intraday patterns.

When will you trade?

Choosing when to trade is just as important as choosing what to trade. The opening minutes of the Indian market (9:15–9:30 AM) are often extremely volatile, filled with gaps, rapid swings, and unpredictable moves. Because of this, many day traders wait until the initial volatility settles and a clear price structure begins to form. This improves decision-making and reduces the chances of entering trades purely out of excitement or fear.

How will you trade?

To trade consistently, you must clearly define the conditions that make a setup valid. This removes guesswork and ensures every decision is based on a rule—not emotion.

Define:

• Your entry conditions must include: What must the chart show before you take a trade? A breakout? A pullback? A trend confirmation?
   
• Stop-loss rules: Decide where you will exit if the market moves against you, and never widen your stop out of hope.
   
• Target levels: Identify planned exit points or profit targets based on structure, risk-reward, or volatility.
   
• Position sizing: Determine how much of your capital you will risk per trade so that one loss never wipes out your account.
  
   

Clear rules act as a filter. They keep you aligned with your strategy and reduce emotional mistakes during fast market movement.

3. Understand the Costs: The Hidden Expenses That Affect Profitability

Intraday trading profits are heavily influenced by transaction charges. Even small costs add up when placing frequent trades.

Brokerage & Transaction Costs (Explained Clearly)

Every intraday trade includes charges such as:

• Brokerage
   
• STT (Securities Transaction Tax)
   
• Exchange transaction charges
   
• GST (18% on brokerage + fees)
   
• Stamp duty
  
   

These can reduce your net profits significantly. New traders must factor these into their strategy so they don’t rely on extremely small gains that get wiped out by fees.

4. Risk Management: Protecting Your Capital Every Day

Most beginners fail not because they lack a strategy, but because they lack a risk framework that protects them from emotional or oversized decisions.

A solid risk plan includes:

Daily Loss Limit
Set a maximum amount you are willing to lose in a single day (for example, 1–2% of your trading capital). Once this limit is reached, stop trading immediately to prevent emotional decisions.

Stop Loss on Every Trade
Never enter a position without a predefined exit point. A stop loss protects your capital when the market moves unexpectedly.

Position Sizing
Choose position sizes that keep each trade’s risk within a safe range. One oversized trade can erase days—sometimes weeks—of progress.

Emotional Awareness
Monitor signs of frustration, overconfidence, revenge trading, or hesitation. Most losses come from emotional reactions, not market behavior.

Additional Note:
If you ever participate in a modern prop-firm environment, remember that managing risk also includes staying aware of the trailing threshold, which determines how much room your account has before violating firm rules.

“Your funded account is not just capital—it’s a responsibility.”

5. Taxation Rules for Indian Day Traders

Since intraday trading is treated differently from long-term investing, traders must know exactly how their profits and expenses are reported.

How Intraday Trading Is Taxed

Profits from intraday equity trading are classified as Speculative Business Income. This means they are added to your total taxable income for the year and taxed according to your income-tax slab (just like salary or business income).

Deductible Trading Expenses
Because intraday income is treated as business income, traders can claim deductions for expenses directly related to trading, such as:

• Brokerage and transaction charges
   
• Internet and mobile data used for trading
   
• Computer hardware or monitors
   
• Market data feeds, charting platforms, or paid tools
   
• Learning resources or trading education
  
   

These deductions help reduce your taxable income and make your trading activity more tax-efficient.

Loss Treatment
Speculative losses can only be set off against speculative gains. They cannot be adjusted against salary income, capital gains, or other income categories. However, proper documentation and filing ensure losses are recorded correctly, which helps reduce taxable profits in future profitable years.

Why This Matters
Clarity on taxation prevents legal issues, avoids unexpected tax bills, and allows traders to plan expenses and withdrawals wisely. In short, understanding taxes is as important as understanding charts.

Final Thoughts: Your Day Trading Journey Starts With Preparation

Day trading in India is absolutely possible, and thousands begin the journey each year. But long-term success depends on preparation, practice, and discipline—not luck or prediction.

Begin your day trading journey with the right foundation and the right funding partner. Explore the  Apex Trader Funding, consider evaluation options like the 25K Tradovate or 50K Rithmic accounts to start trading with structure, capital support, and global market access.