Intraday trading, also known as day trading, is becoming very popular in India, especially among young investors who want to earn quick profits from the stock market. If you are new to trading and wondering what intraday trading means, dont worry. This blog will explain everything in a simple way, using easy examples that anyone can understand.
What is Intraday Trading in Stock Market?
Intraday trading means buying and selling a stock on the same day. That means, if you buy a stock at 10 AM, you must sell it before the market closes at 3:30 PM on the same day.
The main goal of intraday trading is to make small profits from price movements during the day. You do not take the shares home or hold them overnight like in regular investing, also called delivery trading.
Example: If you buy shares of Reliance at 2400 in the morning and sell them at 2420 in the afternoon, you make a profit of 20 per share.
How Does Intraday Trading Work
Intraday trading works in a simple way, but it needs quick decision making. Here is a step by step example:
- You choose a stock you think will go up or down during the day
- You analyse the chart, trends, or news related to that stock
- You place a Buy or Sell intraday order on your trading platform
- You watch the market and exit the trade before 330 PM
- Your profit or loss is added to your account after the trade is closed
Important: In India, the stock market opens at 9:15 AM and closes at 3:30 PM, Monday to Friday.
Pros and Cons of Intraday Trading
Advantages
- Quick profit opportunity within a day
- No risk of holding stocks overnight
- Lower brokerage charges compared to delivery trading
- Useful for people who can monitor markets daily
Disadvantages
- High risk due to fast price changes
- Requires constant attention during trading hours
- Losses can be high without proper planning
- Emotional trading can lead to bad decisions
Simple Strategies for Intraday Trading Beginners
If you are just starting out, follow these simple strategies to avoid mistakes and improve your success
- Start with small capital Do not risk a big amount on the first day
- Trade in liquid stocks Choose shares that are actively bought and sold like Reliance TCS HDFC Bank
- Always use a stop loss This helps limit your losses if the market moves against you
- Follow market news Events like elections RBI announcements or global news can affect stock prices
- Do not trade on emotion Always follow your trading plan not your mood
- Practise using a demo account Many apps let you practise without real money
- Do not trade the whole day Find 1 or 2 good opportunities and focus on them
Common Mistakes to Avoid in Intraday Trading
Even smart traders make mistakes. Avoid these common errors
- Trading without a plan or goal
- Ignoring the stop loss and hoping prices will improve
- Overtrading too many trades in one day
- Copying others blindly without doing your own research
- Getting greedy after one profit and risking more
Remember Intraday trading is like playing a game of chess. You need strategy patience and control.
Conclusion
Intraday trading can be exciting and profitable but only if done with the right knowledge and discipline. Start small learn every day and practise your skills before using big amounts.
Do not forget Always use risk management and never invest money you cannot afford to lose.