Recent data shows a sobering fact: over 70% of retail traders in India lost money on intraday trading in 2023. This reveals how challenging day trading can be without proper knowledge.

Intraday trading means buying and selling stocks within a single trading day. Unlike long-term investors who hold stocks for months or years, day traders close all their positions before the market closes each day. 

They aim to profit from small price fluctuations during market hours. While the risks are high, the rewards of intraday trading can be significant for those who take the time to learn and practice. 

This guide will help you learn how to do intraday trading. These practical steps will help you invest more effectively, even if you’re a new trader or want to improve your results. Let’s get started.

Getting Started with Intraday Trading

Before you start day trading, you must set up a few key things.

Set Up Your Accounts 

You’ll need two accounts: a trading account for buying and selling stocks and a demat account for holding your stocks digitally. 

Many brokers let you open these accounts online using just your Aadhaar and PAN card.

Pick Your Broker 

Look for these critical features when choosing a broker:

• Low trading fees (some brokers charge just Rs. 20 per trade)
• A reliable trading platform that doesn’t crash
• Good customer support
• Helpful research tools

Know the Basics

The Indian stock market, the National Stock Exchange (NSE), runs from 9:15 AM to 3:30 PM IST. Learn the rules of the Exchange Board of India (SEBI) for trading legally and safely.

Tools You Need

Make sure you have the following:

• Fast, reliable internet
• Real-time market data
• Good charting software to analyze stocks
• A trading platform that works well on your computer

With these basics in place, you’ll be ready to learn how to trade effectively.

Key Intraday Trading Strategies for Beginners

Intraday trading offers various strategies catering to different market conditions and preferences. 

Momentum Trading 

Momentum trading focuses on stocks with strong price movements. You’ll track stocks moving significantly up or down and profit from these continued movements. 

You can use technical tools like the Relative Strength Index (RSI) and Moving Averages to measure movement strength.

To implement momentum trading:

• Find actively moving stocks using stock scanners or financial news
• Check that high trading volume supports the price movement
• Enter trades when you see consistent directional movement
• Set clear exit points with target prices or trailing stops

Breakout Trading 

This strategy targets stocks that break through important price barriers. When a stock moves above its resistance level or below its support level, it signals a potential trade.

Key steps for breakout trading:

• Study historical data to find support and resistance levels
• Watch for price movements that break these levels
• Enter trades in the breakout direction
• Place stop-loss orders near the breakout point
• Set profit targets based on the stock’s price swings

Step-by-Step Guide to Intraday Trading

Embarking on intraday trading requires a structured approach to navigate the complexities of the stock market effectively. 

Pre-Market Preparation

Check these key items before trading starts:

Review the latest financial news and earnings reports that could affect stock prices. Focus on economic updates that might move the market.

Look at how international markets perform since global events often affect local stocks.

Make a focused list of stocks to watch. Choose stocks that:

• Trade frequently (high liquidity)
• Show price movement (volatility)
• Have potential for the day’s trading

This preparation helps you spot good trading opportunities and avoid surprises.

Identify Potential Stocks

Look for these key features when choosing stocks:

Trading Volume: Pick stocks that trade often. High volume generally means better liquidity, and you can:

• Buy and sell quickly
• Get better prices
• Avoid getting stuck in a position

Price Movement: Focus on stocks that show good price changes during the day. While this offers more profit chances, remember it also means higher risk.

Use charts and tools like:

• Moving Averages
• RSI
• MACD

These tools help you find good times to buy and sell stocks.

Set Entry and Exit Points

Plan your trades before you start. Know exactly when to buy and sell.

Entry Points: Use charts and indicators to find the best time to buy stocks. Look for clear signals that show when prices might rise or fall.

Exit Points: Set two key price points before trading:

• A stop-loss price to limit your losses
• A target price to take profits

Use automatic orders to sell at these prices. This removes emotion from trading and protects your money.

Remember: Never change these points once you start trading.

Place Orders and Manage Positions

Use these basic steps to manage your trades well:

Order Types:

• Market orders: Buy or sell right away at current prices
• Limit orders: Buy or sell only at your set price

Trade Size: Keep each trade small compared to your total money. This protects you from big losses on any single trade.

Watch Your Trades: Stay alert while your trades are open. Be ready to:

• Change your plan if needed
• Close trades if the market shifts
• Exit if things aren’t working as planned

Monitor and Adjust Trades

Watch your open trades closely throughout the day:

Keep up with market news that could affect your stocks. Quick price changes often follow breaking news.

If a trade isn’t working out, review your analysis. Don’t be afraid to close losing trades quickly. Good traders adapt when market conditions change.

Close Positions Before Market Closes

Always close all trades before the market ends:

Exit all positions before the closing bell. This protects you from price changes that can happen overnight.

After trading, look at what you did that day. Write down your trades and results. This helps you spot your trading patterns and improve your skills.

Risk Management in Intraday Trading

Good risk management helps protect your money and increase your chances of trading success. Here are the key ways to manage risk:

• Stop-Loss Orders: Set a price at which you’ll exit losing trades. For example, if you buy at $50, set your stop-loss at $48 to limit losses to 4%.
• Position Sizing: Don’t risk too much on one trade. Follow the 1% rule – risk only 1% of your total trading money per trade. With $10,000, you’d risk $100 per trade.
• Using Leverage: Be careful with borrowed money (leverage). While it can increase the potential for profits, it also introduces a greater risk of losses. Keep enough cash to cover possible losses.
• Emotional Control: Stick to your trading plan. Don’t let fear or greed change your decisions. Learn from both winning and losing trades to build better habits.

Best Practices for Successful Intraday Trading

Attaining success in intraday trading requires more than just understanding market mechanics; it demands a commitment to best practices that foster continuous improvement and disciplined execution:

Continuous Learning and Market Analysis 

Follow reliable news sources to stay current with financial markets. Learn through online courses and webinars. Use technical tools like moving averages and volume indicators to spot trading opportunities.

Maintaining a Trading Journal 

Record all your trades with detailed notes about entry points, exit points, and reasons for each trade. Review these notes often to spot patterns and improve your methods.

Starting Small and Scaling Gradually

Begin with smaller trades to gain experience safely. Increase your trading volume only after showing consistent profits. This will help you manage risk while building expertise.

Intraday Trading in US Stocks from India

Trading U.S. stocks from India requires understanding key rules and choosing the right tools. 

But here’s the twist: the process is different from trading in Indian markets. Let’s break down what you need to know.

Regulatory Rules: Indian residents must follow the RBI’s Liberalised Remittance Scheme (LRS). This allows you to send up to USD 250,000 abroad each financial year for investments. Remember this limit includes all your foreign transactions for the year.

Trading Platforms: Pick a reliable platform for your trades. Here are some popular options:

• Vested Finance: Access to over 5,000 U.S. stocks and ETFs
• INDmoney: Offers real-time data and portfolio tracking
• HDFC Securities: Partners with global firms to provide U.S. stock trading

When choosing a platform, check its fees, fund transfer methods, support quality, and available stocks. This will help ensure smooth trading experiences.

Is Intraday Trading Suitable for Beginners?

It depends. While Intraday trading offers opportunities to profit quickly from short-term price changes, success requires two key things: solid market knowledge and disciplined decision-making.

Here’s the reality: it’s not for everyone, but with the right mindset, you can make it work. You need strong analytical skills to read charts and spot trends. 

You must also research thoroughly and stay focused on your trading plan. Approach it with realistic expectations — consistent profits take time, practice, and ongoing education. 

Your Next Steps

Here’s what you need to know: Intraday trading takes work, but you can improve your chances of success. Start with these key steps:

• Use a demo account to practice first
• Begin with small trades when using real money
• Learn to manage risk before chasing profits
• Keep studying the markets and improving your skills

Most traders lose money because they rush in unprepared. Take your time, learn the basics, and protect your capital. Open a demo account today and begin your trading journey the right way.