What is Intraday Trading?
Introduction to Intraday Trading for Beginners
If you’re new to the world of the stock market, intraday trading might sound confusing at first. However, there is nothing to worry about; it is easy when you know the basics of the share market. Intraday is an abbreviation of the term same-day. So, intraday trading is when someone buys and sells a stock on the same day, during regular market hours. It is often called day trading.
To start intraday trading, it’s important to first understand the definition of intraday, know how intraday trading works, and slowly learn different intraday trading strategies like using charts, technical indicators, and timing the market. Starting small, on demo accounts, practising, and learning with small steps could be the smartest and safest way to start it, especially for beginners.
Key Takeaways
- Intraday trading is simply the business of buying and selling stocks within the same day, during the daytime, when the stock market is open, hoping to gain a small amount of money from the price of a stock.
- The answer to how to make money in intraday trading lies in using a tried methodology of intraday trading, discipline and risk management.
- The minimum cost to start intraday trading is very minimal, it could be 500, but a good flexibility in trading and margin rating is available at a minimum of 2000-5000 rupees
- In an intraday trading technical analysis, the emphasis is on the price movement, volume, trends, and other essential indicators such as RSI, VWAP, and MACD in order to time in and out.
- Your choice for the best intraday indicators to use to trade intraday depends on the strategy you are going to use; however, popular indicators used are moving averages, Bollinger band, VWAP, RSI and MACD.
- Other intraday strategies include breakout trading, moving average crossovers, volume spikes and VWAP entries, which are all used in spotting short-term opportunities.
- The rules for intraday trading are to put a stop-loss, exit before market close, trade down the trend and begin with small capital.
- The best platform for intraday trading has low brokerage, real-time data, and execution speed, and supports charting, good resources, and Zerodha and Upstox are the best.
Let’s start our guide to Intraday trading.
Definition of Intraday:
The concept of intraday trading implies the process of purchasing an item and reselling it within the same day to get a quick profit. This is simply in the stock market, whereby you purchase some stock in the morning and sell it before the market closes. You do not hold the shares until the next day.
Real-Life Example of intraday trading
Think about buying 10 T-shirts in the morning for, let’s say, 200 rupees each, from a wholesale market. Later, you decide to sell those T-shirts to customers for 250 rupees each. Now you can go home with all the profit and without keeping any stock
- Cost: ₹200 × 10 = ₹2,000
- Selling Price: ₹250 × 10 = ₹2,500
- Profit: ₹500 in one day
You didn’t store anything—you just bought and sold on the same day.
Now, think of this like intraday trading.
Change the T-shirts to 10 shares of a company, each share is 200 rupees, and you buy them in the morning. Later at the end of the day, the price goes up, and you sell all 10 shares before the market closes.
- Buy Price: ₹200 × 10 = ₹2,000
- Sell Price: ₹250 × 10 = ₹2,500
- Profit: ₹500 in one day
This is intraday trading—buying and selling on the same day for quick gains. Just like buying and selling products in a day, but here, you’re doing it with stocks.
How Does Intraday Trading Work?
Intraday trading is the activity of purchasing and selling stocks on the same day. You have a look at the market, and identify a stock which appears to be moving up or down and make a trade.
When you feel that it will rise in price, you purchase it and then resell it when the price increases. In case you believe it is going to go down, you could even sell what you have at hand and buy later (this is referred to as short-selling). It aims to earn fast money out of a few price fluctuations.
You need to have a trading account and a good internet connection, and prefer the best trading platform for intraday, which provides real-time information and quick order execution.
- Buy and sell stocks on the same day – no holding overnight.
- Watch price charts and news for market movement.
- Use stop-loss to limit your risk in case the trade goes wrong.
- Start small, practice, and choose the best trading platform for intraday for better speed and tools.
- Learn simple strategies like support-resistance, moving averages, or volume spikes.
How to start intraday trading as a beginner?
These details will assist you in realising how to start intraday trading even at a novice level and make a wise decision at the very first step.
1. Know how the stock market works
One needs to know how the stock market works before getting in. View some videos, go through some articles, and complete some beginner-level classes on trading. Understand what stocks are, the direction of price and the definition of intraday trading.
2. Opening a Trading and Demat Account
In order to trade the shares, you will have to open a Demat and trading account with a registered broker. Select the ideal trading place in the intraday which has comparatively low brokerage, quick execution, and beneficial charts to perceive.
3. Select Liquid Stocks and Volatile Stocks
Stocks that can easily be bought and sold within no time (high liquidity) and perform well with regard to their prices throughout the day should be experienced by the beginner. This presents you with added opportunities to join and leave the market. The beginners should never risk the low-volume stocks during intraday trading.
4. Read and Apply Easy Intra-Day Strategies
Begin with simple intraday trading strategies such as the support and resistance, moving averages or price action. Do not attempt to follow too many elaborate setups. Learn and be conversant with one or two strategies by practising them.
5. A word of caution to be always employed is Stop-Loss and Risk Management
Market trading may be dangerous. Place a stop-loss so you do not suffer a huge loss when the market trades against you. One should never risk more money than what he or she is comfortable losing. This is a requirement for novices in trading. So, risk management is crucial.
6. Learn to Make Small Trades and Practice
At first, do not think of high profits. Pay attention to studying and training. Use small trades even with dummy/virtual accounts and creep into confidence.
7. Keep abreast of the market news
The intraday traders cannot afford to ignore the news. Stock prices could be influenced by economic reporting, company news, and worldwide happenings. To trade as a novice, you should stay informed because this can improve your judgments.
How to Learn Intraday Trading – Best Ways
Here’s a beginner-friendly way to understand intraday trading and start your journey with confidence.
Step 1: Learn Fundamentals of Trading
Learn basic words such as buy, sell, stop-loss, and movement of the stock prices. Understand what intraday trading is all about-buy and sell a stock within the day.
Step 2: Watch Videos for Beginners
Watch YouTube free and casual videos. The YouTube channel of Neeraj Joshi is awesome and perfect to start trading; he discusses the concepts related to trading using typical and easy-to-understand examples in Hindi.
Step 3: Open a Demat / Trading Account
Select a good broker and get your Demat and trading account. Co-opt the best intraday trading platform that provides real-time charts, lower commission, and an interface.
Step 4: Try a demo account
Make use of a demo or virtual trading account first before trading with real cash. This enables you to learn without taking any risk.
Step 5: Get to know Simple Intraday Strategies
Begin by just utilising simple intraday trading, such as support and resistance or moving average crossover. Do not overcomplicate it and only focus on a single strategy.
Step 6: Accessing Market News Daily
Always read the news of the company, the events taking place globally and economic reports, as they can have an impact on the stock prices. Take the use of money control or ET Markets.
Step 7: Be Informed of Internet Trading Groups
Telegram channels or novice groups on TradingView or Reddit. You will have much to learn about those experiences and the tips of other traders.
Important terms related to intraday trading for beginners
1. Intraday Trading
Purchasing and selling stocks on the same day to get small profits from the change in prices.
2. Broker / Trading platform
A trading service (such as Zerodha, Upstox, Angel One) is a broker that allows one to trade on the internet. You carry out your trades on their app or website.
3. Margin
It is a type of short-term borrowing made available to you by your broker to enable you to purchase a greater amount of shares than your available funds will permit. However, it is dangerous, and losses are increased too.
4. Stop Loss
A safety tool. You are also able to put a limit on your losses, and when the price reaches that point, your position gets automatically closed. It secures your finances.
5. Target Price
The amount of profit you need. You may get out of the trade with a profit in case the price goes it.
6. Volatility
What is the magnitude of the stock movement in price? The more volatile it is, the more opportunity (and risk) to intraday traders there is.
7. Volume
The volume of shares that is traded. Volume means that the higher the volume, the more liquidity it has and can be bought/sold faster.
8. Trend
The trend in which the price of a particular stock is either moving (uptrend (rising), downtrend (falling) or does not have any direction.
9. Charts and Indicators
Graphical instruments to forecast the stock movement. Some of the popular ones are:
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Moving Averages (MA)
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Relativity of strength index (RSI)
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MACD (Moving Average Convergence Divergence)
10. Square Off
Rolling your open position at the end of the trading day or before (3:15 PM). Most brokers automatically square off your trade should you forget.
Basic rules for Intraday trading
These simple tips will assist you in making no big mistakes and increase your opportunity to win:
1. Make it a habit never to trade without a stop-loss
It is always advisable to institute a stop-loss to ensure that you limit the losses in case of a reversal in the direction of the stock. It hinders your capital.
2. Do not stay in positions overnight
When you place an intraday trade, you’re required to close all your positions before the market closes. Holding them beyond that is risky—avoid carrying them overnight to stay on the safe side
3. Trade with a plan
An entry and exit plan should always be known before one executes a trade. Never trade with gut feelings or guesses.
4. Keep Up with the Trend
Market trend trades in the direction of the trend. There are very few winners who go against the trend.
5. Start Small
And if you are a novice, start with a small capital when you trade. Concentrate more on learning and getting experience as opposed to huge profits.
6. Do not trade when News is announced
Avoid making trades when there are major news releases. Prices may change in hectic and unpredictable ways.
7. Pick the Liquid Stocks
Buy the high-volume stocks. This increases the fees of buying and selling in a short time at a price that you want.
8. Intraday trading should be done using the Best Trading platform
Select a good and prompt one with real-time charts, hasty order closure, and technical facilities.
Advantages of Intraday Trading
Here are some advantages of intraday trading:
1. Fast Money in a day
You do not need to count days or months, but intraday trading enables the trader to make profits on the same day of trading.
2. There is no Overnight Risk
The chance of an event that may impact your trade, as overnight news or international events influencing the trade, is nonexistent since all positions are squared off before the market closes.
3. Less Capital Requirement
Most brokers provide money margin or what is termed as the leverage, which allows you to trade more with less money in intraday trades.
4. Greater Trading Opportunities
There are fresh opportunities every day to trade in various stocks. The same shares do not stick with you that much.
5. Beginners’ Fast Learning
Beginners learn faster through the results, whether losses or gains, because it takes a shorter time than long-term investments.
6. Appropriate Active Traders
Are you someone who likes following the market and has fast instincts? Then intraday trading keeps you on your toes.
Disadvantages of Intraday Trading
While intraday trading offers fast profits, it also comes with risks, especially for beginners. Here are some simple and important disadvantages to keep in mind:
Intraday trading is a quick way of getting profits, but it is also associated with risks, especially for novice traders.
1. Great Tendency to lose
It is fast-paced, and you will be risking your capital thinking that you have understood the reason why the price has moved, only to read that you were wrong and you have now lost money within a few minutes. Losses will accumulate beyond expectations when one does not have a plan.
2. Emotion-Driven Mistakes
Day trading as a beginner may be stressful. Bad decisions and overtrading might happen out of fear, greed or panic.
3. Has to be Observed at all times
During market hours, you need to observe the screen keenly. This is not so good when you fail to commit time, or you are full-time employed.
4. Brokerage and Charges Climb Up
Selling and buying frequently provide a higher cost of commission and tax, so on a smaller trade with many trades, it may consume your profit.
5. It is Not Appropriate to All Stocks
Other stocks are just not liquid or do not move much, and/or have a low volume and hence it is difficult to buy/sell them in a hurry. Knowing how to select the wrong stock might lead to being stuck in trades.
6. No Long-term wealth generation
Intraday trading is a short-term oriented form of trade, unlike investing. It does not create long-term buildup in wealth or dividends.
How to make money in intraday trading?
In the business of trading to Make Money Intraday, you require a good Trading Strategy
In intraday trading, luck does not make a difference whatsoever because the key to reaching success is a clear and proven trading strategy. An effective strategy assists you in making decisions on the entry and exit point of a trade, level of risk to be undertaken and the time not to trade. if you do not have a plan, you are betting.
One of the basic intraday trading strategies available to new traders is the following:
Support and Resistance: Buy where there is support and sell where there is resistance.
Moving Averages: Whenever using a 5-minute chart or a 15-minute chart, look to identify any short-term trends.
Breakout Trading: Buy or sell when the share is moving above/below an important price point.
Volume Spike Strategy: This is a strategy that you place a trade when the volume instantly surges and displays either active buying power or selling power.
A stop-loss, risk management and no emotional decision-making are always good strategies alongside a strategy.
Best Intraday Trading Strategies
Here are some of the best intraday trading strategies:
1. Breakout Trading Strategy
This can be applying a trade at the point at which the price of the stock jumps above the resistance or below the support, and with a large volume. It indicates that there is a potential for intense movement.
2. Moving Average Crossover
A short-term and a long-term moving average are crossed above which is a buy signal. When it moves beneath, it is a sell signal.
3. Strategy of Gap and Go
When applied in the morning, this strategy involves the use of the stocks which open with a gap in the price and proceed in the same direction.
4. Momentum Trading
You sell stocks which show good up or down momentum throughout the day. The idea is to get some ride on the trend.
5. Reversal Strategy
This entails determining the time a stock is going to reverse its direction. The traders seek evidence of a turning point in price to enter early.
6. VWAP Strategy (Volume Weighted Average Price)
This is a kind of strategy that finds entry and exit points on the VWAP line. The purchase below and the sale above VWAP can be a sign of strength.
We also have a dedicated blog on this.
If you’re interested, check out: 6 Best Strategies in Trading for Beginners. It explains each one with examples to help you start with confidence.
Best indicators for Intraday trading
Using indicators can help intraday traders make smarter decisions. Here are some of the best indicators for intraday trading, explained in easy language:
1. Moving averages (MA)
Assists you in knowing the trend direction. Intraday trades tend to use short-term moving averages, such as 9 EMA or 20 EMA.
2. Relative Strength Index (RSI)
Indicates whether a stock is overbought or oversold. Where the RSI level is above 70, the market is overbought (it can correct), and below 30 is oversold (it can rally).
3. Volume
Volume informs you of how intense a move in prices is. High volume helps in confirming aggressive buying or selling pressure, which is applicable in a breakout trade.
4. Bollinger Bands
These bands are volatility bands relating to price. Though crossing the upper or lower band, the price can be reversed, which will assist in entries.
5. MACD (Moving Average Convergence Divergence)
Project growth and trend. When the MACD line goes past the signal line, then it is a buy signal and vice versa.
6. VWAP (Volume Weighted Average Price)
VWAP reflects the average price that the stock has traded at per day based on volume and price. It serves as a support or resistance level.
Candlestick analysis for intraday trading
One of the most significant tools is the candlestick charts. They assist traders in the comprehension of the price movement as they display the behaviour of the buyers as well as the sellers at a given time, such as 5, 15 minutes, one hour and so forth.
What is Behind Intraday Trading with Candlestick Charts?
Candlesticks assist one in recognising trends, anticipating a turnaround, and locating buyers’ and sellers’ points. The knowledge of several basic patterns can go a long way in intraday trading when a beginner uses intraday trading.
1. Doji
In the Doji candlestick, the close and the open prices are nearly similar. It expresses uncertainty on the market, and it can be an indication of a trend reversal when observed following major movement.
2. Bullish Engulfing
A tiny candle in red is followed by a huge green candle. This is a good buying measure and a potential up move.
3. Bearish Engulfing
Little flame, green, with a big red in it. It is an indication of selling pressure and a potential decline.
4. Hammer
A candle of small size, the body and the base wick are long. It may be viewed after a fall and signify that buyers are stepping in, a potential move towards an uptrend.
5. Shooting Star
The shooting star candlestick pattern has a small body and a long upper wick, and it is common at the top of a rally. It can indicate a reversal in the decline.
6. Marubozu
A candle without any wicks, but with a solid body. A green marubozu is a powerful buy, and a red marubozu is a powerful sell.
Types of Intraday Trading
Different styles exist in intraday trading, i.e. depending upon your speed of trading and the strategy that you are following. The following are the most typical forms of intraday trading
1. Scalping
Scalping is prompt trading. The idea is that you purchase and sell stocks in minutes, or even in seconds, in order to gain a little profit many times a day. It remains time-demanding and needs a trusted platform for trading.
2. Momentum Trading
You sell shares which have a momentum in one direction, either lower or higher. The traders have a ride on the momentum, and they sell out once the momentum hits a slowdown.
3. Breakout Trading
This refers to when a trader buys a stock when it is breaking above the resistance or below the support, using good volume. It is one of the most famous strategies of intraday trading.
4. Reversal Trading
In this case, you are attempting to anticipate the point at which a trend turns in a different direction. When a stock declines and it still betrays an indication that it is about to rise, you purchase the stock with the hope of a turnaround.
5. Gap Trading
The trading is done using the difference between yesterday’s closing price and today’s opening price. When it opens a Stock much higher or much lower, it will usually attempt to “fill the gap” as the day goes on.
FAQ
Experts suggest that the best time to do intraday trading is from 9:30 AM to 11:30 AM, this is because market movements at that time are active, which is beneficial for intraday trading as it would help in maximum profit.
If you want to choose the best stocks for intraday trading, try to look for the ones with high liquidity, as it will allow you to make quick entries and exits. Try to focus on the stocks which have strong volatility and also a high trading volume. Always stay in touch with the market news and trends to spot potential movers
Choose stocks that react well to the technical indicators, and try to avoid low-cap stocks or unpredictable stocks.
Yes, you will need to pay tax on each of your intraday profits. This is because intraday profits are treated as speculative business income under the Income Tax Act in India. These are taxed as per your applicable income tax slab.
Intraday trading does not have a set amount that one should start trading with; you can literally start trading with just 500 rupees. The answer is yes, if you want to trade with ₹500, you can actually do so, but you may have limited stocks to buy and the net profit after considering brokerage and taxes shall not be that high. When you start by investing a small different amount, such as 2000-5000 rupees, you have an added margin and an opportunity to take care of your risk and returns better.
Here are some of the best books to learn intraday trading:
- How to Make Money in Intraday Trading by Ashwani Gujral – Practical strategies focused on Indian markets.
- Come Into My Trading Room by Dr. Alexander Elder – Covers trading psychology, tactics, and risk management.
- A Beginner’s Guide to Day Trading Online by Toni Turner – Easy-to-understand basics for new traders.
- High Probability Trading by Marcel Link – Focuses on discipline, realistic expectations, and consistency.
- Technical Analysis of the Financial Markets by John J. Murphy – A detailed guide to technical analysis, crucial for intraday trading.
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