How to Start Intraday Trading

Intraday trading, also known as day trading, involves buying and selling stocks within the same trading day. It is a high-risk, high-reward strategy that requires knowledge, discipline, and quick decision-making. This guide will help you understand how to start intraday trading effectively.

1. Understanding Intraday Trading

Intraday trading means executing trades within a single day. Traders aim to make profits from short-term price movements instead of holding stocks for the long term.

2. Choosing the Right Stock Broker

To start intraday trading, you need a trading and Demat account with a reliable stockbroker. Some of the top brokers in India include:

• Zerodha – Low brokerage and advanced charting tools.
• Upstox – Fast trading platform with low fees.
• Angel One – Good for beginners with research support.
• ICICI Direct – Full-service broker with strong research.
• 5Paisa – Affordable trading for small investors.

3. Selecting Stocks for Intraday Trading

Choosing the right stocks is crucial for successful intraday trading. Consider:

• High Liquidity: Stocks with high trading volumes are better for intraday.
• Volatility: Choose stocks that show significant price movement during the day.
• Sector Trends: Follow trending sectors for better opportunities.
• Market News: Stocks affected by news and announcements offer trading opportunities.

4. Learning Technical Analysis

Intraday trading relies on technical analysis. Key indicators include:

• Moving Averages: Helps identify trends.
• Relative Strength Index (RSI): Measures stock momentum.
• Bollinger Bands: Shows volatility and price trends.
• Support and Resistance Levels: Helps set entry and exit points.

5. Setting a Trading Strategy

Successful intraday traders follow strict strategies. Some common strategies are:

• Scalping: Making multiple small trades for quick profits.
• Momentum Trading: Trading stocks that show strong price movement.
• Breakout Trading: Buying when a stock moves beyond a key level.
• Reversal Trading: Identifying trend reversals to make trades.

6. Managing Risk in Intraday Trading

Risk management is essential for minimizing losses. Follow these tips:

• Use Stop Loss: Always set a stop-loss limit to protect your capital.
• Risk-to-Reward Ratio: Maintain at least a 1:2 ratio (risk ₹100 to make ₹200).
• Avoid Overtrading: Stick to a set number of trades per day.
• Trade with Discipline: Follow your strategy and avoid emotional trading.

7. Placing Your First Intraday Trade

Once you have selected a stock and strategy, follow these steps:

• Log into your trading platform.
• Select the stock and choose the Intraday option.
• Enter the quantity and order type (market or limit order).
• Set a stop-loss and target price.
• Monitor the trade and exit before the market closes.

8. Monitoring Market Trends

Stay updated with market trends by:

• Reading financial news from sources like Moneycontrol and Economic Times.
• Following global markets and economic indicators.
• Tracking technical charts and stock movements.

9. Common Mistakes to Avoid

New traders often make mistakes that lead to losses. Avoid:

• Trading without a strategy.
• Ignoring stop-loss orders.
• Investing all capital in a single trade.
• Holding losing trades for too long.

Conclusion

Intraday trading can be profitable if done with discipline, knowledge, and risk management. Start with small trades, learn technical analysis, and follow a structured approach to become a successful trader.