The most essential requirement for day trading is "capital." Capital is day trader's lifeline. If you don't have money in your trading account, you will not be allowed to trade. It is as simple as that. Also traders need to have enough funds to withstand a string of losses and have the flexibility to take a wide array of trades.
Now in order to determine the funds needed for trading, risk management must be addressed. As a normal practice, traders normally follow a rule of risking only 1% or less of the total capital. It means, as an example, on a capital of Rs. 1 lakh, a trader cannot risk more than Rs. 1000 per trade. To make it easy for you to understand, here is an example. If you buy a stock at Rs. 100 and place a stop loss at Rs. 99, risk is Rs. 1 on the trade. If your trade position is 1000 shares, your trading risk on that trade is 1000 x 1 = Rs. 1000, i.e. 1% risk on a trading capital of Rs. 1 lakh. This trading risk always must be 1% or less than that of the day trading account balance. If you suffered few losses and your capital goes down to, lets say Rs. 90000, you cannot risk more than Rs. 900 per trade. So as your capital grows, your risk taking capacity will grow and as your capital shrinks, your risk taking capacity will also go down with it. By following this 1% rule, capital will be preserved during losing streaks, which inevitably occur. By only risking one percent, even a ten trade losing streak keeps most of the capital intact.
Proper utilization of trading capital:
We do not need to keep all the required capital in cash with our broker. We always can take some margin on our investments in stocks, mutual funds, ETFs etc. Lets say you decided to trade in stock futures and for that you require Rs. 1 lakh. You have also some stocks and ETFs worth Rs. 1 lakh in your demat. In that case, you can pledge these stocks and ETFs to your broker and get a margin of around Rs. 75000. Now you need Rs. 25000 only in cash.