What is Intraday Trading in Share Market?

1. What Intraday Trading Means
Intraday trading means you don’t hold any position overnight. You buy shares in the morning (or whenever during the market hours) and sell them before the market closes. The idea is to catch small price movements during the day and turn them into profit quickly.

2. Why Traders Choose Intraday
People choose intraday trading because they want to make profits fast. Instead of waiting for a stock’s price to rise over months or years, day traders try to earn money from tiny jumps and dips in price during one single day.

3. Same‑Day Cycle
Think of intraday trading like a loop. At the start of the day you decide which stock to trade, you place a buy order, you watch how it moves, and then—at some point—you place a sell order. That’s the full cycle, and it all happens before the market bell rings to close.

4. No Overnight Risk
One big advantage is avoiding overnight surprises. If news breaks after hours—like an earnings report or a global event—long‑term investors will wake up to new price levels. Intraday traders sidestep that by having no positions when the market reopens.

5. The Role of Leverage
Leverage is like borrowing money from your broker so you can trade with more than just your own cash. In intraday trading, brokers often let you use 5×, 10×, or even higher leverage. That means with ₹10,000 of your own money, you might trade ₹50,000 or more worth of shares. This “boost” can greatly increase potential gains… but it can also magnify losses.

6. Margin Requirements
To use leverage, you must keep a certain balance—called a margin—in your trading account. If your trades go against you and your margin falls too low, the broker can issue a “margin call.” If you can’t top up your funds, the broker might close your open trades automatically.

7. Order Types Simplified

• Market Order: You pay whatever the price is right now. It’s quick but you accept the current rate.
• Limit Order: You set the price you’re willing to pay (buy) or accept (sell). If the market hits your price, the trade happens. If not, it never executes.
• Stop‑Loss Order: You decide a point where you’ll take a loss to prevent it from getting bigger. When the stock hits that price, your order turns into a market or limit order and exits your trade.

8. Transaction Costs Add Up
Every trade comes with fees—brokerage, exchange charges, transaction taxes, and more. Since intraday traders often do many trades in a single day, these costs pile up quickly. Even if you make small profits on each trade, fees can eat into what you keep.

9. The Fast‑Paced Nature
Intraday trading is as much a mental sport as a financial one. You must watch price charts, follow news feeds, and react in seconds. There’s little time to think things through leisurely—action is constant.

10. Common Strategies: Scalping
Scalping means making very quick trades for tiny profits—sometimes just a few ₹ per share. A scalper might enter and exit a position within minutes or even seconds. The goal is to repeat this many times a day, stacking up small gains.

11. Common Strategies: Momentum Trading
Momentum traders find stocks that are moving fast in one direction—up or down—and jump in to ride the wave. When the rush slows or reverses, they get out. They often use volume indicators to see if many traders are piling in.

12. Common Strategies: Reversal Trading
Reversal traders look for stocks that have moved too far, too fast. They bet on a quick “bounce back” or “reversal” of price. For example, if a stock drops 5% in minutes, they might buy, expecting a snap‑back of 1–2%.

13. Technical Analysis Basics
Most intraday traders use charts full of lines and patterns. They look at moving averages (e.g., 5‑minute or 15‑minute charts), support and resistance levels, and simple indicators like Relative Strength Index (RSI) or Average True Range (ATR). These tools help decide when to get in or out.

14. The Importance of a Trading Plan
A trading plan is like a map. It includes:

• Which stocks you’ll trade
• Entry rules (what price, what indicator)
• Exit rules (profit target, stop‑loss)
• Position size (how many shares, how much capital)
• Maximum daily loss (the absolute most you can lose in one day before you stop trading)

Without a plan, you’re just guessing—and the market will usually win.

15. Risk Management
Risk management means controlling how much you can lose on any single trade. Many traders risk just 1–2% of their total capital per trade. If a trade goes against them, they lose a small amount and are ready for the next opportunity.

16. Psychological Discipline
Intraday trading can be emotionally draining. Fear and greed can sneak in, forcing you to break your rules. Sticking to your trading plan, no matter what, is critical for long‑term survival.

17. Paper‑Trading Practice
Before you use real money, practice on a “paper-trading” platform. This lets you buy and sell with virtual funds. You’ll experience the speed and stress without risking your capital. Treat paper trading seriously so you build good habits.

18. Starting Small
When you graduate to real trading, start with small sums you can afford to lose. This way, even if things go badly, you won’t face financial hardship. As you gain experience and confidence, you can scale up your trade sizes.

19. Market Hours Matter
In India, the stock market runs from 9:15 AM to 3:30 PM IST. The first hour (9:15–10:15 AM) and last hour (2:30–3:30 PM) are often the most volatile—many day traders focus on these “opening” and “closing” windows to capture big moves.

20. Watching Economic News
News events—like RBI announcements, quarterly earnings, or global cues—can spark sharp price swings. Intraday traders keep an eye on economic calendars to know when these events happen and how they might impact volatility.

21. Technology & Tools
Having a fast computer, reliable internet, and good trading software is crucial. Delays of even a few seconds can turn a winning trade into a loser if the price moves before your order executes.

22. Broker Selection
Different brokers offer different levels of leverage, brokerage rates, and trading platforms. Compare:

• Brokerage per trade (flat fee vs. percentage)
• Speed of execution
• Margin facility
• Charting tools
• Customer support quality

23. Regulatory Landscape
In India, the Securities and Exchange Board of India (SEBI) regulates trading. They set rules on leverage, margin, and reporting. For instance, SEBI mandates that all open Day Trading positions be marked-to-market at the end of each day, and profits or losses accounted immediately.

24. Pattern Day‑Trader Rule
Some regulators or brokers limit the number of intraday trades you can place if your account balance is below a certain threshold. It’s important to know these limits so you don’t inadvertently get your trading privileges restricted.

25. Record‑Keeping & Taxes
Intraday traders must track every buy and sell, including the price, quantity, and fees paid. At tax time, day trading profits are considered “business income,” and you may need to pay advance tax on your expected earnings. Keeping neat records makes filing taxes easier.

26. Adapting to Different Markets
While most examples here refer to Indian markets, the same intraday principles apply worldwide—NYSE, NASDAQ, LSE, etc. You just need to adjust for local hours, regulations, and currency.

27. Advantages of Intraday Trading

• Quick Returns: Potential for daily income.
• No Overnight Risk: Positions are closed before after‑hours news can hit.
• Flexibility: You can trade part‑time or full‑time.

28. Disadvantages of Intraday Trading

• High Stress: It demands constant attention.
• Transaction Costs: Can eat into small profits.
• Risk of Large Losses: Leverage can backfire if market moves sharply against you.

29. Indicators of Good Intraday Stocks
Look for:

• High Liquidity: Easy to buy/sell without big price jumps.
• Significant Volume: Shows trader interest.
• Volatility: Enough price movement to make profits.
• Clear News Catalyst: Earnings releases or corporate events to spark movement.

30. Daily Routine Example

• 8:30 AM: Check global markets and news.
• 9:00 AM: Finalize watchlist—maybe 5–10 stocks showing early strength or weakness.
• 9:15 AM: Market opens—observe opening range for first 15 minutes.
• 10:00 AM: Place trades based on your plan.
• 12:00 PM: Review trades, take a short break—avoid overtrading in low‑volatility hours.
• 2:30 PM: Watch for closing volatility and take any last trades.
• 3:30 PM: Market closes—review your performance, update your trading journal.

31. Trading Journal
Write down every trade: entry time, exit time, reasons, outcome, emotions felt. Reviewing this journal weekly helps you spot strengths and mistakes.

32. Continual Learning
The markets evolve. Strategies that worked last year might fail today. Successful day traders keep reading market research, watching tutorials, and even taking refresher courses.

33. Community & Mentorship
Joining trading communities—online forums or local groups—can speed up your learning. A mentor who’s been day trading for years can show you pitfalls to avoid.

34. Emotional Check‑Ins
Before you start trading each day, ask yourself:

• “Am I relaxed or stressed?”
• “Do I have any big distractions today?”
  If you’re not in the right mindset, consider sitting out.

35. When to Stop for the Day
Successful intraday traders know when to quit:

• If you hit your daily profit target, lock in gains and stop trading.
• If you hit your maximum loss limit, take a break and return the next day.

This prevents “revenge trading,” where you chase losses and compound mistakes.

36. Technology Aids
Some platforms offer “one‑click trading,” hotkeys, and algorithmic triggers. Advanced traders sometimes build simple scripts or use “algo” features to automatically enter or exit when conditions are met.

37. Beware of Overtrading
Trading too much can lead to poor decisions from fatigue. It also adds costs. Make sure each trade has a clear purpose, not just trading for the sake of action.

38. Handling Breakouts
A “breakout” is when a stock moves beyond a known support or resistance level on strong volume. Traders often buy breakouts (or sell short) expecting a strong move to continue, but false breakouts can happen, so stop‑loss orders are critical.

39. Short Selling Intraday
You can also sell first and buy later—called “short selling.” If you expect a stock to fall, you borrow shares to sell at today’s price, then buy back at a lower price to return them, pocketing the difference. Short selling carries its own risks, especially if the stock jumps up.

40. Building Confidence Slowly
It’s common to feel shaky the first few months. Losses will happen. The key is to learn from them, refine your plan, and build confidence one step at a time.

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By breaking intraday trading into these digestible pieces, you’ll see that it boils down to:

1. Picking a few liquid, volatile stocks.
2. Using a plan with clear entry and exit rules.
3. Managing risk with stop‑losses and position sizing.
4. Keeping emotions in check.
5. Learning constantly and reviewing your trades.

With practice, discipline, and good tools, intraday trading can become a structured way to seek short‑term profits—while recognizing it comes with high stress and high risk. Always start small, learn from experience, and treat it like a business rather than a casino. Good luck!