How to Become a Trader in India: Full Process Explained (Beginner to Pro)

How to Become a Trader in India: Full Process Explained (Beginner to Pro)

 

What Is a Trader?

A trader is someone who buys and sells financial assets like stocks, commodities, currencies, or derivatives with the goal of making a profit—either in the short term (intraday/swing) or long term.

There are different types of traders:

• Intraday Trader – Buys and sells on the same day.

• Swing Trader – Holds positions for days or weeks.

• Positional Trader – Holds for months.

• Scalper – Makes quick trades for small profits, many times a day.

Step-by-Step Process to Become a Trader

 

Step 1: Understand the Reality of Trading

Before you begin:

• Trading is not gambling, but it can feel like it if you don’t follow discipline.

• It requires learning, patience, and emotional control.

• 90% of new traders lose money due to greed, over-leverage, and lack of a plan.

Ask yourself:

Are you willing to lose money while learning?
Can you manage emotions under stress?
Are you disciplined enough to follow a routine?

If yes, read on!

Step 2: Learn the Basics of the Market

Start learning the fundamentals:

• What is NSE, BSE, MCX?

• What are stocks, futures, options, commodities, forex?

• What moves the market? (News, data, global cues)

• Market timings:

  • Equity: 9:15 AM – 3:30 PM

  • Commodities: 9:00 AM – 11:30 PM

 

Recommended Free Resources:

• YouTube channels: Pranjal Kamra, Neeraj Joshi, CA Rachana

• Websites: Investopedia, Zerodha Varsity

• Books:

  • Trading for a Living by Alexander Elder

  • Market Wizards by Jack Schwager

  • Technical Analysis of Financial Markets by John Murphy

 

Step 3: Choose Your Segment

There are 4 main segments in trading:

⚠️ Beginners should start with Equity cash segment, and only move to F&O once confident.

Step 4: Open a Trading & Demat Account

You’ll need a Demat and Trading account to start trading. Some popular brokers in India:

Documents Required:

• PAN card

• Aadhaar card

• Bank account

• Signature (scanned)

• Income proof (for F&O)

 

Step 5: Learn Technical Analysis

Technical analysis is key for traders. Learn:

• Candlestick patterns (Doji, Engulfing, etc.)

• Support & Resistance

• Indicators: RSI, MACD, Moving Averages, Bollinger Bands

• Chart patterns: Head & Shoulders, Cup & Handle, Triangles

Use platforms like:

• TradingView – For charts & analysis

• Investing.com – For economic news/calendar

• Moneycontrol – For stock-specific news

 

Step 6: Create a Trading Strategy

Never trade randomly. Build a trading plan:

Backtest your strategy on historical charts and paper trade first.

Step 7: Start with Small Capital

Start with ₹5,000 to ₹25,000 in equity. Never use borrowed money.

For intraday, SEBI allows up to 5x margin, but beginners should avoid leverage.

Practice discipline over profits.

Step 8: Use Tools & Platforms

Here are essential trading tools:

Step 9: Journal Your Trades

Maintain a Trading Journal:

• Entry price, exit price, stop-loss

• Reason for the trade

• Mistakes made

• Emotional state (fear, greed, revenge)

This will help you track performance and improve.

Step 10: Learn Risk & Money Management

This is where most traders fail.

Rules:

• 1:2 risk-reward ratio at least

• Never risk more than 2% of capital on one trade

• No revenge trading

• Always have a stop-loss in place

 

Step 11: Stay Updated

Follow:

• Global markets (Dow Jones, Nasdaq)

• Economic news (CPI, Fed Rates, RBI Policy)

• Crude oil and USDINR movement

Websites to follow:

• Moneycontrol

• Economic Times

• BloombergQuint

• NSE India, SEBI

 

Step 12: Understand Taxes in Trading

File ITR-3 if you are a trader. Consult a CA for accuracy.

Step 13: Consider Full-Time or Part-Time Trading

Start part-time. Go full-time only when:

• You have at least 6 months of profits

• You have emergency savings for 12 months

• You’re mentally and emotionally ready

 

Career Options in Trading

• Retail Trader – Trade with your own capital

• Proprietary Trader – Trade with firm’s capital (Prop firms)

• Algo Trader – Automate strategies using code

• Institutional Trader – Work for banks, funds (requires CFA, MBA, etc.)

• Educator/YouTuber – Teach others & build brand

 

Final Tips

• Avoid “stock tips” groups

• Don’t over-leverage

• Accept losses—they’re part of the game

• Master psychology—it matters more than analysis

• Be patient—consistency takes time

 

Summary Checklist