What is Day Trading?

Day trading, also called intraday trading, refers to the practice of buying and selling financial instruments within the same trading day. All positions are opened and closed before the market closes.This approach focuses on short-term movements in price. It is common in equities, foreign exchange, futures, and options.

Day traders look for liquid and volatile securities and enter or exit when the timing seems suitable. The concept involves analysing charts, news, and patterns to make quick decisions. The approach behind intraday trading is simple.

Traders buy and sell securities on the same day without carrying positions overnight. They may buy first and sell later, or sell first and buy later, depending on market conditions. Market behaviour often depends on collective actions of traders and investors. 

Some may enter the market when they see opportunity, while others may exit when they sense risk. These continuous movements create chances for day traders to take part. 

How Does Day Trading Work In India? 

After learning what is day trading in share market, let’s understand how it works. Day trading in India works through a set of steps and tools that help traders act within the same trading day. Here's how day trading in India usually functions. 

• In India, day trading is available in equities, equity F&O, currency F&O, and commodities. 
• A Demat and trading account linked to a bank account is required. 
• Traders open and close positions on the same day without carrying them overnight. 
• Access to a trading desk helps frequent traders execute orders quickly and with better liquidity. 
• Research software enables traders to view charts, test strategies, analyse patterns and select day trading stocks. 
• Traders use charts, indicators and price movements to identify entry and exit points. 
• Technical analysis plays an important role in making decisions. 
• Real-time financial news is useful because reports, global events and regulations may affect prices. 
• Monitoring market trends helps traders understand volatility and place trades more carefully. 

Day Trading Rules and Regulations 

SEBI provides guidelines to maintain safe and fair practices. Some essential rules and regulations points include: 

• Maintain Minimum Margin Requirement: Traders must maintain a margin which iis a certain percentage of the trade value.
• Short Selling Rules: Both individual and institutional traders could short sell, but naked short selling is not allowed in Indian markets. Moreover, all short positions must be closed during settlement. 
• Intraday Gain Usage: Gains from intraday cannot be reused on the same day. 
• Risk Disclosure Requirement: Brokers must inform clients about risks linked with leverage, volatility, and margin trading. 
• Settlement Compliance: All intraday positions must be squared off before market closure. This avoids overnight risk and ensures regulatory compliance. 

How to Start Day Trading for beginners? 

Regarding intraday trading, it's best to keep an open mind. While there's a chance of profit, there's a real risk. In addition, here are some additional considerations to consider when entering the day trading business. 

1. Before starting, an investor needs to figure out their strategy :When an individual starts day trade, they may occasionally have to lose money, which terrifies people into making poor decisions. It's essential to have an exit plan for each investment portfolio so the investor can avoid making emotional decisions if they are going to make a rational decision.
    
2. Keep Patience: Look for opportunities that aligns with one’s trading plans. If the situation doesn’t meet the needs, avoid entering any trade.
    
3. Overview Market: Investors need to watch what is happening on the markets constantly. Major news unrelated to their investments may change the market tone and move positions without company news. 

Top Strategies for Day Trading 

A beginner in day trading must follow some essential and helpful strategies. Strategies in intraday trading for beginners are as follows.

1. Momentum Trading: Momentum trading is the identification of the market trend. A market trend can be bullish, bearish, or sideways.
2. Range Trading: Range trading means identifying support and resistance levels at the right moment when entering or leaving a trade. The Fibonacci Retracement level indicator is often used in drawing support or resistance lines. 
3. Scalping: Scalping is the practice of engaging in many extremely brief trades and keeping the profits from profitable deals.
4. High-Frequency Trading: HFT uses an automated computer-based trading system to track price movements and place automatic trades. 

Individuals must have a Demat and trading account to operate as a day trader. To open an account and start trading, investors must provide their PAN card, Aadhaar Card or Selfie photo. Investors may also use this account to purchase commodities, currencies, futures or options in addition to stock trading. 

Advantages and Disadvantages of Day Trading 

Along with the day trading meaning, it is vital to understand its advantages and drawbacks. The key benefits and limitations of day trading are as follows. 

 Conclusion

Day trading can result in gains or cause huge losses. This is an extremely risky choice of investment. Though day trading is still a fascinating prospect for individual investors, anyone who thinks they could make this happen requires knowledge, resources, and cash to enable them to succeed. Investors can explore day trading on their online trading app and trade with research & plan.