What Is Intraday Trading?
Intraday trading, also known as day trading, means buying and selling stocks within the same trading day. All positions must be closed before the market closes at 3:30 PM. You never actually receive delivery of the shares; instead, you profit or lose based on the price difference between your buy and sell price.
How Intraday Trading Works
In intraday trading, you take advantage of short-term price movements in a stock during the day. For example:
- You buy 100 shares of a company at Rs 200 in the morning.
- The price rises to Rs 210 by afternoon.
- You sell all 100 shares, making a profit of Rs 1,000 (minus brokerage and taxes).
If the price falls instead, you book a loss. Intraday traders typically use leverage (borrowed margin) which amplifies both gains and losses.
Tools and Analysis Intraday Traders Use
Since positions are held for hours or minutes, intraday traders rely primarily on technical analysis:
- Candlestick charts: Visual representation of price movement over time periods.
- Volume analysis: High volume confirms the strength of a price move.
- Indicators: RSI, MACD, Bollinger Bands, and moving averages help identify entry and exit points.
- Support and resistance levels: Key price zones where stocks tend to reverse or break out.
Risks of Intraday Trading
Intraday trading carries significant risk and is not suitable for most retail investors. Key risks include:
- Rapid losses if the market moves against your position
- Emotional decision-making under pressure
- High transaction costs eroding profits
- Leverage amplifying losses beyond your initial capital
Multiple studies show that over 80–90% of intraday traders lose money. Most losses happen because traders lack a system, risk management, or emotional discipline.
Who Should Consider Intraday Trading?
Intraday trading is best suited for people who:
- Have a strong understanding of technical analysis
- Can dedicate full attention to markets during trading hours
- Have a tested trading strategy with clear entry and exit rules
- Can emotionally handle losses without deviating from their plan
If you are a beginner, avoid intraday trading until you have learned the basics thoroughly. Start with delivery trades or mutual fund investing instead.
Intraday vs. Delivery Trading
In delivery trading, you buy shares and hold them for more than one day, with actual delivery to your demat account. This is less stressful, requires less active monitoring, and generally leads to better outcomes for most retail investors.
Key Takeaway
Intraday trading is a high-risk, high-skill activity. It can be profitable for experienced traders with a solid strategy and iron discipline, but it is not a reliable income source for most people. If you are just starting out, focus on learning and long-term investing before exploring intraday trading.
