Some practical wisdom for daytraders in India.

  1. Prepare your watchlist and your trading plan in advance. If you are executing orders manually, do not shortlist more than 8 stocks. Shortlist only from the liquid stocks included in the Nifty 100 index. Do not fish for new stocks to trade during market hours. Stick with your preplanned watchlist datapoints. Prepare your watchlist and datapoints a day before. 
  2. Initiate your intraday trades only after 9.30 AM. Wait for the amateur traders to take their positions and create the liquidity you need to enter your trade without excessive slippage cost. 
  3. Most days, trend is not your friend when it comes to daytrading in India. In the context of daytrading in India, reversal trades offer better risk to reward ratio than trend based trading. In a market where near 50% of the traded volume are generated by automated systems and self learning algorithms, majority of the intraday price movements you watch are just arbitrage trading and not the price following any directional trend. 
  4. As a beginner, do not expect someone else to show you that unique path to take in your individual daytrading journey. You need to discover it on your own. All the information you learn and experiment in the beginning years through reading, listening, watching, etc helps you close the doors to these publicly available gyan that do not work, so you can finally triangulate the critical information that are important to your decision making and might actually help in your daytrading.  This self discovery by succesful daytraders happens anywhere between 3 – 5 years. This unique trading edge you find with a strong conviction is the product of your subconscious mind. This breakthrough that happens subconsciously is what will pivot your individual struggle as a amateur daytrader towards a path of consistent success in retail daytrading. This is when you will stop looking for more, because you have now discovered what you need.
  5. Daytrading is seen as a speculation activity in the eyes of the law and there is an obvious reason to it. If you are an individual retail daytrader you need to be extremely lucky, to not lose your trouser to the big players in the daytrading arena. To quantify it, you need to be luckier than the 95-98 % of the retail participants that loose their money everyday in daytrading. All the knowledge and experience that you accumulate can only help you leverage your luck. As an individual retail daytrader what helps you take the right trade at the right time is your element of favorable luck. If you consistently find yourself on the losing side, you should stop speculating. When luck is not in your favor, take a break from daytrading for a few months or few years and then test again, luck’s got to change someday.
  6. In the Indian context, having surplus funds in your trading account is “the most important resource” for a fulltime individual daytrader.  If you do not have access to surplus trading funds, acquiring trading knowledge, attending trading courses and subscribing to trading tools does not help. After a time horizon of 3-5 years from a beginner, if you plan to continue with fulltime daytrading, you will need at least 15 -20 lacs INR as your trading funds for leveraging your acquired knowledge and experience. A fulltime daytrader could get activity-trapped doing technical analysis all night and day, without making any money from a lifetime spent on daytrading, if their trading account is not sufficiently funded.