What Is Intraday Trading?

Intraday trading means buying and selling shares within the same day. The stock market opens at 9:15 AM and closes at 3:30 PM. If you buy shares in the morning and sell them before the market closes, it is called intraday trading. If you don’t sell them, your position will be automatically closed by the broker.

What Is Automatic Closure in intraday Trading?

If you do not close your intraday trade by 3:30 PM, the broker will automatically square off your position. This prevents holding positions overnight.

What Is Margin in Intraday Trading?

In intraday trading, brokers provide up to 5x margin. If you have ₹1,00,000 in your account, you can buy shares worth ₹5,00,000 using margin. This means higher potential profits, but also higher potential losses.

Shorting in Intraday Trading

Shorting is selling a stock first and buying it later at a lower price. If you believe a stock will fall from ₹1,000 to ₹800, you sell it at ₹1,000 and buy it later at ₹800, making a profit of ₹200. Brokers lend you shares for shorting, which must be returned by the end of the day.

Best Time to Trade in Intraday Trading

Avoid trading during the first and last hour of the market. Start observing the market from 9:15 AM, but ideally trade after 11:00 AM. Close your positions by 2:30 PM.

Understanding Volume in Intraday Trading

Volume means the number of transactions. Volume helps confirm the price movement. If the price goes up but volume goes down, the trend might reverse. If both price and volume increase, the trend may continue.

Time Frames in Intraday Trading

Start with the 1-hour time frame to understand the market trend. Mark important levels. Do your main analysis on the 15-minute chart. For better entries, use the 5-minute chart.

Technical Analysis in Intraday Trading

You focus on charts instead of company fundamentals. Technical analysis includes candlestick patterns, price action, chart patterns, and volume analysis.

Advantages of Intraday Trading

• 5x Margin: Enables higher trade volume with same capital.
• Quick Results: Profit or loss is realized the same day.
• High Monthly Returns: Some traders earn 20% monthly returns.

• losed the same day.
• Time-Consuming: Requires full attention and chart monitoring.
• Difficult to Learn: Takes time and practice to master.
  

  Disadvantages of Intraday Trading

  • High Risk: Losses are magnified due to margin.

  • What is Cryptocurrency and How It Work?

Conclusion

Intraday trading offers fast results and high rewards, but it comes with high risks. Understand margin, shorting, volume, and time frames before you begin. Learn technical analysis and practice with discipline to succeed in intraday trading.