Beginner’s Guide to Intraday Trading: Basics, Tips & Strategies
Intraday trading is when you buy and sell a stock within the timeframe of one day, possibly profiting from small fluctuations in price. Unlike long-term investing, intraday trading is about decision-making and taking advantage of short-term opportunities.
Generally, it is performed by active traders who seek to take advantage of market movements and volatility. This can be quite profitable but involves risk due to the necessity of closing positions before the market closes. For beginners, it is important to understand the market basics, use the necessary tools to manage your trades properly, and maintain discipline.
Read Related Blog: What is Intraday Trading and How to Do It?
Why Intraday Trading for Beginners? – Pros & Cons
Intraday trading has both advantages and challenges. Here’s a quick look:
| Pros | Cons |
|---|---|
| You don’t hold stocks overnight | High risk due to fast price movements |
| Small capital needed, margin is allowed | Losses can happen quickly without a plan |
| Give quick results. Get the profit or loss in a day | Requires constant watching of stock prices |
| Can trade from home | Need good internet, platform, and discipline |
Note: “Margin” means the broker allows you to trade with more money than you have, like a short loan.
How to Start Intraday Trading – Step-by-Step Guide
To begin intraday trading, you need to prepare yourself and have adequate knowledge of the market overall. So if you are considering how to start trading for beginners, remember to keep this simple, find the appropriate trading tools, and establish a disciplined process. Below are the steps on how to start intraday trading:
- Learn how the stock market and intraday trading work.
- Choose a reliable broker and trading platform.
Step 1: Open a Demat & Trading Account
Step 2: Understand Leverage & Margins
Step 3: Choose Liquid & Volatile Stocks
| Stock Type | Why It Helps Beginners |
|---|---|
| High Liquidity | Fast buying/selling |
| Good Volatility | More chances to earn |
| Nifty 50 Stocks | Trusted and stable companies |
Avoid penny stocks (very low-priced stocks) in the beginning, as they are risky.
Intraday Trading Strategies for Beginners
Here are basic intraday trading strategies to get started with online trading for beginners:
- Focus on a few strategies: Just learn 2-3 simple strategies and practice them consistently. For example, buy when a stock crosses above its 50-day average.
- Set a goal: Decide how much profit or loss you’ll accept.
- Use stop-loss: Automatically sell if the price goes down too much.
- Don’t overtrade: One or two good trades are better than ten bad ones.
Moving Average Crossovers, RSI, Bollinger Bands, MACD
Technical indicators allow traders to make better decisions when day trading by identifying trends, momentum, or entry or exit points. For trading for beginners, you can start with a few indicators that are easy to use and that you can trust.
- Moving Average Crossovers: Show trend direction changes.
- Relative Strength Index (RSI): Measures stock momentum and overbought/oversold levels.
- Bollinger Bands: Indicate volatility and potential price breakouts.
- MACD (Moving Average Convergence Divergence): Highlights trend strength and reversals for accurate trade timing.
Momentum, Reversal, Gap-and-Go, Scalping
Beginner-friendly strategies allow you to identify opportunities simply based on movements in the market. Momentum trade involves buying stocks that move up in value quickly in order to pick up a short-term gain. A reversal trade is where you look for stocks that seem to stop their downward trajectory and begin to break upward once again.Gap-and-Go is a strategy that looks for stocks that have a price gap and tend to follow the same movement. Finally, there is scalping, where a trader makes multiple trades to obtain small but frequent profits in a short period of time.
Time Frames & Best Trading Hours for Intraday Beginners
| Time Slot | Suitability for Beginners |
|---|---|
| 10:00 AM- 10:15 AM | Too volatile, avoid at the start |
| 10:15 AM – 2:30 PM | Best for beginners |
| 2:30 PM – 3:15 PM | Volatile again, advanced only |
Start trading at 10:15 AM after the early rush settles.
Risk Management in Intraday Trading for Beginners
Risk management is one of the most essential components of intraday trading, especially for new traders. It not only protects your capital, but also stops you from making emotional and irrational decisions. Here are some simple tips:
- Always use stop-loss to limit your losses.
- Don’t use all your money; start small.
- Avoid trading on emotions like fear or greed.
- Book profits early, don’t wait too long.
- Don’t trade just because the market is open.
Tools & Platforms for Intraday Trading Beginners
| Tool Type | Why It Matterss |
|---|---|
| Trading Platform | To place orders and track prices |
| Charting Tools | To study stock movements |
| To study stock movements | To know market-moving events |
| Broker Support | To resolve problems or doubts quicklys |
Findoc offers beginner-friendly apps with easy navigation, charting tools, and expert tips.
Common Mistakes Beginners Make in Intraday Trading
Many new traders lose money in intraday trading because they only consider basic rules and their emotions when trading. Therefore, it is critical to build discipline and follow your own plan. Avoid these common mistakes:
- Trading without a plan
- Ignoring stop-loss
- Overtrading to make up for losses
- Blindly following others’ tips
- Risking too much money in one trade
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Frequently Asked Questions
You can start intraday trading with as little as ₹500 to ₹1,000, thanks to the margin offered by brokers. Margin allows you to trade for a higher value than what you actually have. However, starting with ₹2,000 to ₹5,000 is safer for better flexibility and learning.
The best chart time frame for a beginner is the 15-minute chart, which is much easier to interpret, and shows a smoother price flow. Advanced traders may use 1-minute or 5-minute charts. However, these require more decisions in a faster time frame and a greater level of experience.
Select liquid and volatile stocks that have a high trading volume and clear trends based on price. You may consider looking at stocks driven by a news event or sector, and technical indications for better opportunities to enter and exit trades.
Some common strategies are momentum trading, reversal trading, breakout trading, and scalping. All these strategies are used to quickly enter and exit without holding the stock overnight or for extended periods. This allows you to take advantage of short-term profit along with managing risk.