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What is Intraday Trading and How to Invest in Intraday Trading?

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The simplest way to enter the share market for a beginner is through the Equity Market. An equity market is a market in which shares of companies are traded, which means buying and selling of shares takes place. Investing in the share market has never been so diversified today you can start trading as per your time availability, risk appetite and area of interest. In this post, we will discuss Intraday trading, so let’s get started!

What is Intraday Trading?

Intraday Trading Intoduction

Intraday trading in India is trending in the news where we can see some experts make huge profits and people new to the market lose their money due to some basic mistakes like partial knowledge, not identifying risky capacity or not maintaining a stop loss. In any form of trading, it is believed that it is not the trade that results in profit or loss, but it is the psychology behind the trade. The more control you have over your mind, the less you will get consumed by greed and more likely to execute a healthy trade.

How Intraday Trading Works?

Intraday trading is a form of trading where a trader buys and sells the stock on the same trading day; one cannot carry forward the trade to the next day like in delivery based trading.

For Example, if you buy 100 shares of Tata Motors as an intraday trade, you will have to sell all the 100 shares on the same day before the market closes; normally, the stock market is active & running between Monday to Friday from 9.15 am to 3.30 pm. So, one might think about what happens if he does not square off his positions on the same day. If you do so, your brokerage firm will square off your positions on your behalf before the end of the trading hours and will charge you with a fine. So, it is advisable that you should square off your positions on the same day to avoid a fine.

Intraday trading is not for investment purposes but to earn profit from the movement of stocks. Intraday trading is a lot riskier due to uncertainty in the market, price volatility, and volume fluctuations in the stocks. In the intraday, stocks can be bought on a margin basis. Think of it as buying more quantity of shares for less amount, so you have to settle the trade on the same day.

We will understand margin-based intraday trade with an example; consider the share price of Airtel is Rs.550, then to buy 100 shares of Airtel, you will need Rs.55,000 (550X100), but if you buy 100 shares of Airtel as an intraday trade, you will need only Rs.5,500 (Considering 10X margin) which is around 1/10th of Rs.55,000. Margin may vary from stock to stock and broker to broker.

Strategies For Intraday Trading:


One might think what should be the trading strategies for intraday trading. Here are few strategies listed below using which you can earn decent profits and minimize your loss:

  • Choose liquid shares –

    The availability of buyers and sellers is important for intraday trading, so choose a highly liquid stock, like large-cap stocks.

  • Research your stocks –

    Before investing in any stock, you should know about the company’s growth and sales.

  • Maintain stop loss –

    Maintain a habit of placing your orders with a stop loss strictly to avoid huge financial impact.

  • Follow the Market Trend –

    Don’t move against the market trend; respect the market and go with the flow.

  • Book Profit –

    You should book your profits from time to time when your target is reached. Don’t let your greed interfere with your decision.

  • Don’t Try To Average Existing Position –

    Don’t enter a new position just to average the loss of the previous position; chances are you will end up in a loss for such trades, instead book your previous loss.

  • Don’t Trade to Recover Loss –

    You should have the courage to bear with the loss and move on. Don’t just forcefully trade to recover the loss.


Hope this article gave you some valuable insights into Intraday trading and how to pick intraday stocks. Ending with a note, never enter a trade without a stop-loss; make this a habit you will thank me later. Good Luck!

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