Intraday trading explained: How to make fast trades & earn more

Intraday trading has gained popularity among Indian traders looking for quick profits by buying and selling stocks within the same trading session. Unlike traditional investing, where stocks are held for long-term gains, intraday traders aim to capitalise on short-term price movements. This form of trading requires speed, strategy, and a good understanding of market trends.

Understanding the fundamentals of intraday trading, market timings, strategies, and key factors such as NSE holidays can help traders improve their decision-making and profitability. This article provides a complete guide to intraday trading, including essential tips and risk management strategies to help traders navigate the volatile market.

What is intraday trading?

Intraday trading involves buying and selling financial instruments such as stocks, commodities, or indices within the same trading session. Traders do not hold positions overnight and must square off all trades before the market closes. The objective is to profit from price fluctuations that occur within the trading day.

How does intraday trading work?

Intraday traders monitor real-time price movements, identify trends, and execute trades based on technical analysis. Since positions are closed on the same day, traders rely on short-term strategies to generate returns.

Steps to execute an intraday trade

1. Select a stock with high liquidity and volatility.
2. Analyse price trends using technical indicators.
3. Set entry and exit points to manage risk.
4. Place buy or sell orders through a brokerage platform.
5. Monitor price movements and adjust strategies accordingly.
6. Square off all positions before market closure.

Key features of intraday trading

1. Short-term trading – Positions are not carried forward to the next trading day.
2. Leverage – Traders can buy or sell stocks with a margin, allowing higher exposure with limited capital.
3. High volatility – Intraday trading is influenced by short-term price fluctuations.
4. Market dependency – Economic news, corporate earnings, and global events affect market movements.

Best time to trade in intraday

Timing plays a crucial role in intraday trading. Understanding market sessions can help traders optimise their strategies.

Market hours for intraday trading in India

The National Stock Exchange and Bombay Stock Exchange operate during the following hours:

1. Pre-opening session: 9:00 AM – 9:15 AM (Order matching and price discovery)
2. Regular trading session: 9:15 AM – 3:30 PM (Main trading hours)
3. Closing session: 3:30 PM – 3:40 PM (Trade settlement)

Best time to trade intraday

1. Opening hours (9:15 AM – 10:30 AM) – Market volatility is high due to overnight global developments and news.
2. Mid-session (11:00 AM – 1:30 PM) – Market stabilises, making it ideal for trend-based strategies.
3. Closing hours (2:00 PM – 3:30 PM) – High activity as traders exit positions, causing sharp price movements.

How NSE holidays impact intraday trading

Market holidays impact liquidity and trading volume. Traders should be aware of NSE holidays to avoid unexpected market closures.

Why tracking NSE holidays is important

1. Avoid placing trades on non-trading days.
2. Plan trading strategies around holiday periods to avoid low liquidity.
3. Adjust risk management strategies before long weekends.

Intraday trading strategies

To succeed in intraday trading, traders use different strategies based on market trends and price movements.

1. Momentum trading

This strategy involves identifying stocks with strong price movements and entering trades in the direction of momentum. Traders use volume indicators and moving averages to confirm trends.

2. Scalping

Scalping focuses on making small profits from multiple trades throughout the day. Traders hold positions for a few minutes, capitalising on minor price changes.

3. Breakout trading

Traders buy stocks when prices break above resistance levels or sell when they break below support levels. This strategy works best with high volatility stocks.

4. Reversal trading

This approach involves trading against the trend by identifying potential reversals. Traders use candlestick patterns and relative strength indicators to predict trend changes.

Risk management in intraday trading

Risk management is crucial for minimising losses in intraday trading.

1. Set stop-loss orders

A stop-loss automatically exits a trade if the price moves against expectations, preventing significant losses.

2. Avoid over-leveraging

Using high leverage increases risk exposure. Traders should maintain a manageable leverage ratio.

3. Trade with a plan

Successful traders follow a pre-defined plan, including entry and exit strategies, position sizing, and risk tolerance.

4. Keep emotions in check

Fear and greed can lead to impulsive decisions. Sticking to a trading strategy helps maintain discipline.

Common mistakes to avoid in intraday trading

Many beginners make mistakes that lead to losses. Avoiding these errors can improve trading performance.

1. Trading without a plan

Entering trades without a strategy increases the likelihood of losses. A well-defined plan improves consistency.

2. Ignoring risk management

Failing to use stop-loss and risk controls can lead to heavy losses. Always have an exit plan.

3. Holding positions too long

Intraday trading requires quick decision-making. Holding positions beyond market hours results in unintended risks.

4. Trading based on emotions

Fear and excitement often lead to poor trading decisions. Logical analysis should drive trades.

How to start intraday trading in India

New traders can begin intraday trading by following a structured approach.

1. Open a trading and demat account

Select a brokerage that offers intraday trading facilities with low transaction costs.

2. Learn technical analysis

Understanding price charts, trend lines, and indicators improves trading accuracy.

3. Choose high-liquidity stocks

Focus on stocks with high daily trading volumes for better execution.

4. Start with a demo account

Practicing with virtual funds helps traders gain experience before using real money.

Advantages of intraday trading

Intraday trading offers multiple benefits for active traders.

1. No overnight risk

Since trades are closed the same day, there is no risk from overnight market fluctuations.

2. Potential for quick profits

Traders can capitalise on small price movements within hours.

3. Leverage benefits

Brokers provide margin trading, allowing traders to take larger positions with smaller capital.

4. No delivery costs

Since stocks are not held overnight, intraday traders avoid demat and settlement charges.

Disadvantages of intraday trading

Despite its advantages, intraday trading also has risks.

1. High volatility risk

Rapid price fluctuations can lead to unexpected losses.

2. Emotional stress

Intraday trading requires constant monitoring, which can be stressful.

3. Brokerage costs

Frequent trading increases transaction costs, reducing profits.

4. Requires expertise

Success in intraday trading depends on market knowledge and technical skills.

Conclusion

Intraday trading is an exciting way to profit from short-term price movements, but it requires skill, discipline, and a solid strategy. Understanding market trends, using risk management techniques, and keeping track of NSE holidays helps traders make informed decisions.

For beginners, starting with a small capital, learning technical analysis, and practicing with a demo account can improve trading skills. By avoiding common mistakes and following a structured approach, traders can increase their chances of success in intraday trading.