Intraday trading

How to Do Intraday Trading?

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Intraday trading is one of the most popular ways to trade in the stock market, where traders buy and sell stocks within the same trading day. Unlike long-term investing, intraday trading focuses on quick profits from price movements, making it highly rewarding but also risky.

This guide will walk you through how to start intraday trading, strategies, risk management, and tips to succeed.

1. What is Intraday Trading?

In intraday trading, traders buy and sell stocks on the same day, aiming to profit from short-term price fluctuations.

  • Trades must be closed before the market closes at 3:30 PM in India.
  • Positions not squared off automatically convert to delivery trades (if sufficient funds are available).
  • Leverage is available, allowing traders to buy large positions with less capital.

Who Should Do Intraday Trading?

  • Traders who can monitor the market actively during trading hours.
  • People with a high-risk appetite and knowledge of market trends.
  • Investors who want quick profits instead of long-term holding.

2. How to Start Intraday Trading

Step 1: Open a Trading and Demat Account

  • Choose a broker that offers fast order execution, low brokerage fees, and margin trading (e.g., Zerodha, Upstox, Angel One, ICICI Direct).
  • Ensure your account has an intraday trading option enabled.

Step 2: Select Stocks for Intraday Trading

  • Pick stocks that have high liquidity (e.g., Reliance, TCS, HDFC Bank).
  • Focus on high volatility stocks that move 3-5% daily.
  • Check market trends, news, and sector performance before trading.

Step 3: Use Technical Analysis

  • Moving Averages – Identify stock trends and potential entry/exit points.
  • Relative Strength Index (RSI) – Helps in identifying overbought/oversold stocks.
  • Volume Analysis – Confirms strong price movements with high volumes.

Step 4: Set Stop Loss & Target Price

  • Always set a stop-loss (e.g., 2% below the buying price) to limit losses.
  • Define a target price to lock in profits and avoid greed.

Step 5: Monitor the Market & Execute Trades

  • Enter and exit positions based on your strategy and risk management plan.
  • Avoid emotional trading and stick to your plan.

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3. Best Intraday Trading Strategies

1. Momentum Trading

  • Focuses on stocks that show strong movement in one direction due to news or trends.
  • Buy stocks that break resistance levels with high volume.

2. Breakout Trading

  • Involves trading stocks that cross key support or resistance levels.
  • Enter a trade when the stock price breaks out with increased volume.

3. Scalping

  • Traders make multiple small trades throughout the day for small profits.
  • Requires quick execution and high liquidity.

4. Reversal Trading

  • Based on RSI and moving averages to identify trend reversals.
  • Buy stocks that recover from oversold zones and sell overbought stocks.

Also Read: Option Trading: A Beginner’s Guide to Making Profits in the Stock Market

4. Risk Management in Intraday Trading

Intraday trading is highly risky, so risk management is crucial:

  • Never risk more than 2% of your capital per trade.
  • Set stop-loss and stick to it to avoid big losses.
  • Use trailing stop-loss to lock in profits as stock prices move up.
  • Avoid trading on emotions or tips—always rely on analysis.
  • Do not overtrade—stick to 3-5 trades per day to reduce losses.

5. Best Stocks for Intraday Trading

Ideal intraday stocks should have high liquidity, volatility, and correlation with market trends.

Top Stocks for Intraday Trading in India

  • Reliance Industries
  • TCS
  • Infosys
  • HDFC Bank
  • Tata Motors

Best Indices for Intraday Trading

  • Nifty 50
  • Bank Nifty

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6. Common Mistakes to Avoid

  • Not using stop-loss – Leads to huge losses in volatile markets.
  • Overtrading – Making too many trades can increase brokerage costs and losses.
  • Trading without a plan – Entering trades without analysis leads to poor decisions.
  • Ignoring news and events – Economic and corporate news impact intraday stock movements.

Also Read: How to Find the Best Penny Stocks for High Returns

7. Conclusion: Is Intraday Trading Right for You?

Intraday trading offers high profit potential, but it also carries high risk. It requires technical knowledge, quick decision-making, and discipline. If you can dedicate time, follow strategies, and manage risk, intraday trading can be a profitable venture.

Start with a small amount, practice with virtual trades, and gradually develop your trading skills. With experience and proper strategies, you can increase your success rate in intraday trading.

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