Intraday trading — or day trading — involves buying and selling stocks within the same trading day. While it may look simple from the outside, successful intraday trading requires strong discipline, strategy, and real-time decision-making. In this guide, you’ll learn the step-by-step process of intraday trading and the top mistakes to avoid.

What is Intraday Trading?

In intraday trading, you do not take delivery of shares. All positions must be closed before the market closes (3:15 PM IST). You trade on price fluctuations during the day, aiming to book quick profits using leverage — but that also increases the risk.

To place an intraday order, you must clearly select the ‘Intraday’ (MIS) option while placing the trade. This gives you higher leverage, but it also means the position must be squared off the same day — and you are responsible for doing it.

5 Essential Steps for Intraday Trading

1. Pick the Right Stocks

Select stocks that are:

  • Highly liquid (easily buy/sell in large volumes)

  • Volatile enough to show meaningful price movement

  • News-sensitive and follow predictable technical patterns

Keep a curated watchlist of 10–15 stocks and review it regularly.

2. Use Technical Charts for Entry & Exit

Most intraday decisions rely on technical analysis. Look for:

  • Support and resistance levels

  • Breakouts and breakdowns

  • Volume confirmations

Example:

  • Buy near support or on breakout above resistance

  • Sell near resistance or on breakdown below support

Tools like moving averages, RSI, MACD, and Bollinger Bands can also help.

3. Place the Right Type of Order

Decide between:

  • Market Order: Executes instantly at current price

  • Limit Order: Executes only at your specified price

Use limit orders in volatile markets for better control, and define whether you’re using a cover order (with stop-loss) or bracket order (with stop-loss + profit target).

4. Monitor Your Position Continuously

Once a trade is live, stay alert:

  • Track price action using charts

  • Watch for breaking news, earnings, or global cues

  • Stay ready to act if the trade moves sharply

Intraday trading is not a ‘set and forget’ game — it demands active monitoring.

5. Close All Positions Before 3 PM

Always exit your trades manually before 3 PM — don’t rely on your broker’s auto square-off after 3:15 PM. This ensures:

  • Better exit prices

  • No surprise losses or missed closures

Also, review your P&L daily and track how it affects your total capital. Stick to a risk plan — both per-trade and per-day loss limits.

Avoid These 3 Cardinal Sins of Intraday Trading

1. Trading Without Stop-Loss & Target

  • Always define a stop-loss and profit target upfront.

  • Never wait to “see how it goes” — markets move fast.

  • Avoid averaging down when the trade goes against you — it often compounds the loss.

2. Going Against Market Momentum

  • Don’t bet against the trend unless you’re highly experienced.

  • If the trend is up, buy the rally or buy the dips.

  • Trying to predict reversals often leads to losses.

“Trend is your friend — respect it.”

3. Overtrading or Risking Too Much

  • Never risk more than you can afford to lose.

  • Set clear daily loss limits.

  • If your loss limit is hit, log off — don’t chase your losses.

Hope is not a strategy. Discipline is..

Final Thoughts: Intraday Trading Needs a Game Plan

Intraday trading is not gambling — it’s a skill built through:

  • Practice

  • Strategy

  • Emotional control

  • Capital discipline

If you’re a beginner, start with paper trading or small trades to get comfortable. Always keep learning and tweaking your strategy based on results.

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