Intraday trading, also known as day trading, is a fast-paced and potentially lucrative way to make money in the stock market. Unlike long-term investing, intraday trading involves buying and selling financial instruments within the same trading day. For those committed to learning the intricacies, mastering intraday trading can lead to consistent profits and financial independence. Below, we provide an Intraday Trading Step by Step, tailored for beginners and intermediate traders looking to strengthen their skills.
What is Intraday Trading?
Intraday trading, often called day trading, involves buying and selling financial instruments like stocks, options, or futures within the same trading day. Unlike traditional investing, where trades can be held for days, weeks, or even years, intraday trades are squared off before the market closes.
Intraday traders rely heavily on price volatility, technical indicators, and timely execution to make profits. The aim is to capitalize on small price movements in high-volume stocks or indices using real-time data and fast decision-making.
Understand the Basics of Intraday Trading
Before entering the market, it is essential to grasp the foundational concepts of intraday trading:
- Trading Timeframe: All positions are squared off before the market closes.
- Objective: Profit from small price movements in a short time.
- Market Instruments: Focus on equities, indices, futures, and options.
Develop a clear understanding of key terms, including bid-ask spread, leverage, margin, stop-loss, and candlestick charts.
Types of Financial Markets:
- Equity markets (stocks, indices)
- Derivatives markets (futures and options)
- Commodities
- Currency markets
Key Trading Instruments:
- Stocks
- ETFs
- Index options/futures
- Commodities (like gold, crude oil)
- Currency pairs (INR/USD, EUR/USD, etc.)
A basic knowledge of how these instruments work is the backbone of intraday trading success
Why Intraday Trading? Benefits vs. Risks
Benefits:
- Quick returns: No need to hold positions overnight.
- Leverage: Brokers often provide higher leverage for intraday traders.
- Opportunities every day: Market volatility presents daily chances to profit.
Risks:
- High risk: Small price swings can lead to big losses.
- Emotional stress: Requires intense focus and emotional discipline.
- Capital erosion: Without strategy, consistent losses can wipe out capital.
Understanding these risks and benefits is crucial before diving in.
Choose the Right Trading Platform and Broker
Selecting a reliable broker is critical to your intraday success. Look for:
- Low brokerage fees and fast execution
- Robust charting and analytical tools
- User-friendly interface with mobile access
- High intraday margin (if required)
Top platforms in India include Zerodha, Upstox, Angel One, and ICICI Direct.
Open a Demat and Trading Account
You must have both Demat and trading accounts to participate in intraday trading. Most brokers offer combined accounts with quick digital onboarding. Ensure your account type supports intraday trades, sometimes marked as MIS (Margin Intraday Square-off).
To get started:
- Choose your broker.
- Submit KYC documents (PAN, Aadhaar, bank details).
- Open a Demat and Trading Account.
- Link your bank account.
- Activate intraday trading features.
Most brokers offer app-based onboarding within 24–48 hours.
Learning Market Timings and Trade Cycles
In India, market timings for equity trading are:
- Pre-opening session: 9:00 AM to 9:15 AM
- Normal session: 9:15 AM to 3:30 PM
- Post-market session: 3:40 PM to 4:00 PM
Intraday trading is allowed only during the normal session. Time management is vital — morning volatility (9:15–10:30 AM) offers most opportunities.
Learn Technical Analysis Thoroughly
Technical analysis is the backbone of intraday trading. It enables you to predict price movements based on past data. Master the following tools:
- Candlestick Patterns (Doji, Hammer, Engulfing)
- Moving Averages (SMA, EMA)
- Volume Analysis
- Support and Resistance Levels
- RSI (Relative Strength Index)
- MACD (Moving Average Convergence Divergence)
- Bollinger Bands
Use charting platforms like TradingView or your broker’s inbuilt software to analyze these indicators effectively.
Fundamental Analysis: Is It Needed for Intraday?
While fundamental analysis is more useful for long-term investing, intraday traders must stay updated with:
- Company earnings releases
- Global economic indicators
- News that impacts specific sectors (like RBI policy)
Even intraday trades can be impacted by a single breaking news headline.
Build a Solid Intraday Trading Strategy
Your trading strategy is your roadmap. Beginners can start with one or two proven strategies, such as:
Breakout Trading Strategy
Identify price breakouts from resistance or support levels with high volume and enter positions with a strict stop-loss.
Learn Details: What is a Bullish Breakout Strategy?
Moving Average Crossover
When a short-term moving average crosses over a long-term average, it indicates a buy/sell signal.
Gap Up/Gap Down Strategy
Trade on stocks that open significantly higher or lower than the previous day’s close.
Learn Details: How to Trade Gap Up and Gap Down Stocks
Momentum Trading
Pick stocks with strong price action and news-based catalysts.
Learn Details: What Is Momentum Trading Strategies And How It Works?
Each strategy should include entry and exit rules, position sizing, and a risk-reward ratio.
Practice with Virtual Trading Platforms
Before risking real money, practice with virtual money.
Benefits of Demo Trading:
- Learn the platform interface.
- Test different strategies without financial risk.
- Build confidence in real-time trading scenarios.
Many brokers like Zerodha, Upstox, and Angel One offer free demo or paper trading tools through platforms like TradingView and Sensibull.
Master Risk Management and Position Sizing
Capital protection is more important than profit generation. Follow these risk management principles:
- Never risk more than 1-2% of your capital on a single trade.
- Use a trailing stop-loss to protect profits.
- Set a daily stop-loss limit (e.g., 5% of your capital).
- Avoid overtrading. 3–5 well-researched trades a day are more than enough.
- Follow the Risk/Reward ratio of at least 1:2.
Create a Trading Journal and Review Regularly
Maintain a trading diary that includes:
- Entry and exit points
- Reason for the trade
- Profit or loss
- Emotional state during trade
Review this weekly to identify patterns, mistakes, and improvement areas.
Stay Updated with Market News and Events
Global events, financial results, economic indicators, and government policy impact intraday movements.
- Check pre-market news daily.
- Track major economic data (GDP, inflation, Fed/RBI policy).
- Use financial portals like Moneycontrol and Investing.com.
Tip: Set news alerts and economic calendar reminders to stay informed.
Stay informed about earnings reports, RBI policies, US Fed statements, and commodity price movements.
Develop the Right Mindset and Discipline
Intraday trading is not just numbers—it’s a psychological game. Cultivate:
- Patience to wait for the right setup
- Discipline to follow your strategy and stop-loss
- Emotional detachment from wins or losses
- Willingness to learn from mistakes
- Consistency in execution
Remember: Successful intraday trading is 80% discipline and 20% strategy.
Keep Learning Continuously
Markets evolve daily. Keep learning through:
- Books: “How to Make Money in Intraday Trading” by Ashwani Gujral, “Technical Analysis of the Financial Markets” by John J. Murphy, Price Action Trading Beginner to Advanced.
- Webinars and YouTube Channels
- Online courses on Udemy, Zerodha Varsity, or Coursera
The more you learn, the better you adapt.
FAQs – Frequently Asked Questions About Intraday Trading
1. Can I start intraday trading with ₹1000?
Yes, some brokers allow trades with ₹1000, especially in options or penny stocks. But it’s better to start with at least ₹5,000 to ₹10,000 for flexibility and diversification.
2. Which time is best for intraday trading?
The most volatile and profitable window is 9:15 AM to 10:30 AM, and again from 1:30 PM to 2:30 PM, when price movements are more predictable.
3. Is intraday trading legal in India?
Absolutely. It is legal and regulated by SEBI. You must use a SEBI-registered broker to ensure compliance and protection.
4. What is the best indicator for intraday trading?
There is no “best,” but a combination of VWAP, RSI, and Moving Averages works well for most traders.
5. How much profit can I make per day?
Returns vary greatly. Some traders aim for 1% to 2% per day, but consistency is more important than large profits. Losses are also part of the game.
6. What taxes apply to intraday trading?
Profits are treated as business income, and you may need to pay income tax + GST on brokerage and STT charges. Keep proper records for filing.
Final Words on How to Learn Intraday Trading Step by Step
Learning intraday trading is a systematic process that involves building knowledge, practicing strategies, mastering technical tools, managing risk, and nurturing discipline. It’s not a get-rich-quick scheme but a skill that can generate consistent returns when practiced with dedication and intelligence.
