What is Intraday Trading?

Intraday trading refers to taking a position and squaring it off or exiting it in the same trading session. These trades are considered short-term trades and the strategies and factors taken into consideration are vastly different as compared to long-term trades. Intraday trading can be carried out in stocks, commodities, currencies, as well as derivatives segments.

Stock market participants carry out trading and investing and hold their positions for different time durations, varying from a few seconds to a few years. Some even hold their positions for decades. Of these different trading durations, we will be discussing intraday trades and learn what are the intraday trading strategies.

Trade timing is one of the intraday trading rules you must keep in mind. For intraday trading, you must square off or close (or exit) your position 15 minutes before the end of the trading session. If it is not squared off, the broker will square off your position at whatever the market price available at that moment. In case you wish to hold your position till 3:30 or for the next day or longer, you must convert your position to delivery. This can be done easily from your trading terminal or the app itself. In this scenario, the brokerage applicable to delivery trades will be applied to your intraday trade.

You can manually square off your trade or set a stop loss or target order. It is advisable to set these orders right after taking the trade so that your capital is protected from a spike on the opposite side of your view.

Intraday Trading for Beginners

Here, we will list some of the popular intraday trading strategies used by traders to make profits. The basic rules of the strategy will also be mentioned. While these strategies are successful most of the time, we cannot guarantee that they will always work. To ensure that you make a decent profit, it is advisable to carry out back-testing of these strategies on the stocks you will be choosing for your intraday trades. You should set a favorable risk-to-reward ratio of at least 1:2 or more to ensure profitability.


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