What is Intraday Trading and How to Do It? A Trader’s Guide
Intraday trading, also known as day trading, is a style of trading where market positions are opened and closed within the same trading day. It’s fast-paced, requires precision, and demands a sharp understanding of market movements. Whether you’re a beginner looking to get started or a pro refining your strategy, understanding the core concepts of intraday trading is essential to maximize gains and minimize risk.
What is Intraday Trading
Intraday trading involves buying and selling securities—such as stocks, indices, or derivatives—within the same trading session. The goal is to capitalize on small price movements rather than holding positions overnight.
Unlike long-term investing, intraday trading doesn’t rely on fundamental analysis of a company’s performance. Instead, traders focus heavily on technical indicators, price action, volume, and short-term patterns.
How to do Intraday Trading?
1. Open a Trading & Demat Account with the Right Broker
Start by choosing a SEBI-registered broker that matches your trading style. Look for:
Competitive brokerage charges
A fast, intuitive trading platform (both web and mobile)
Real-time charting tools and analytics
💡 Brokers like Findoc offer user-friendly platforms designed specifically for active traders.
2. Learn Technical Analysis and Understand the Risks
Before placing your first trade, ensure you have a basic understanding of:
Chart patterns
Indicators like RSI, Moving Averages, VWAP
Support and resistance levels
Also, recognize the high-risk nature of intraday trading and learn how to manage it wisely.
3. Practice with Paper Trading
Don’t jump in with real money immediately. Simulate trades using a demo account or paper trading tools to:
Test strategies
Analyze market movements
Gain hands-on experience without the financial risk
4. Pick Liquid Stocks That Align with Your Strategy
Focus on stocks with high trading volumes and price volatility. These stocks:
Offer easier entry and exit
React well to technical signals
Are better suited for short-term moves
Ensure the stock aligns with your indicator-based strategy.
5. Set a Clear Exit Plan and Stick to It
Before entering a trade, define:
Entry point based on your analysis
Target price to take profits
Stop-loss level to cut losses early
Avoid impulsive decisions and follow your trading plan with discipline.
Most Effective Intraday Trading Indicators
Technical indicators are essential tools for traders. They help identify trends and shortlist stocks with strong momentum. Some of the most commonly used intraday trading indicators are:
Moving Averages (MA)
Relative Strength Index (RSI)
Bollinger Bands
MACD (Moving Average Convergence Divergence)
VWAP (Volume Weighted Average Price)
It’s not necessary to use all intraday trading indicators, as overanalysis can lead to decision paralysis. Traders should choose the indicators that align best with their trading style.
Popular Intraday Trading Strategies in 2025
| 1. Breakout Trading | Traders watch key support or resistance levels. A breakout beyond these levels, backed by volume, often signals the start of a strong move. Tip: Use volume confirmation to filter out false breakouts. |
| 2. Momentum Trading | Here, traders ride the wave of a strong trend, entering as momentum picks up. Indicator Tip: RSI and MACD help spot overbought or oversold conditions. |
| 3. Scalping | Scalpers make dozens (or even hundreds) of trades in a day, targeting small profits per trade. Timeframe: 1-minute to 5-minute charts. |
| 4. Reversal Trading | This strategy involves identifying potential reversal points based on candlestick patterns, divergence, or support/resistance zones. Use With Caution: Reversal trading requires experience and risk control. |
| 5. VWAP Strategy | VWAP helps identify whether the stock is trading above or below its average price. Institutions often use VWAP as a benchmark. Basic Rule: Buy when price is above VWAP, sell when it’s below. |
Timeframe for Intraday Trading
The 15-minute and daily candlestick charts are among the most commonly used, though some traders prefer the 1-minute chart for quick entries and exits. There’s no one-size-fits-all approach—it depends entirely on your trading strategy and risk profile.
Common Intraday Time Frames:
1-Minute Chart: Best suited for scalping and ultra-short-term trades.
5-Minute Chart: Offers a balanced perspective, ideal for most intraday strategies.
15-Minute Chart: Helps identify trade setups and chart patterns effectively.
Hourly Chart: Useful for confirming the broader intraday trend.
Intraday Trading vs Delivery Trading
| Feature | Intraday Trading | Delivery Trading |
|---|---|---|
| Holding Period | Within a day | Days to years |
| Risk Level | High | Moderate to Low |
| Margin Requirement | Low (due to leverage) | High (full payment) |
| Analysis Type | Technical | Fundamental |
| Transaction Cost | Higher (frequent trades) | Lower |
Final Thoughts
Intraday trading offers immense potential but demands knowledge, discipline, and continuous learning. Whether you’re just starting or refining your strategies, focus on process over profits. Understand technical tools, follow a solid plan, and manage risks like a professional.
Remember: Consistency is more important than big wins. Patience, practice, and persistence will define your success in the world of intraday trading.
FAQs on Intraday Trading
In intraday trading, you must square off your position before 3:15 PM on the same trading day. If you don’t close the position manually, your broker will automatically square it off after 3:15 PM.
Intraday trading demands continuous attention, quick decision-making, and real-time market monitoring. Therefore, it’s generally not suitable for individuals with full-time jobs or limited screen time during market hours.
No, fundamental analysis isn’t required for intraday trading. Intraday traders primarily depend on technical analysis tools such as candlestick patterns, moving averages, and momentum indicators to make trading decisions.
Liquidity is crucial in intraday trading. High liquidity ensures narrower bid-ask spreads and allows traders to enter and exit positions quickly without significant price impact. Low liquidity can lead to slippage and difficulty in executing trades efficiently.
Yes, you can convert an intraday position into a delivery trade, provided you do so before 3:15 PM. You’ll need to pay the full amount for the stock to take delivery and hold it beyond the trading day.