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Intraday trading is a trading strategy in which investors invest their money in shares as soon as the share market opens or at any given time in the day and sell the same investment by the end of the trading session, which is by 3:30 pm. There is either a profit or a loss by the end of the day, and this excites the investor to trade more intraday as, if there is a profit, the investor has earned that much in a day.

Intraday trading tips in India

To avoid incurring a loss in intraday trading, here are some intraday trading tips which may help investors to invest with precaution:

  1. Understand the terms of the intraday market such as long position, short position, stop loss, IOC, support level, and resistance level where:
  • The long position is buying on the belief that the share price will increase by the end of the trading session.
  • Short position is buying on the belief that the share price will decrease by the end of the trading session.
  • IOC (Immediate or cancel) is an order that must be executed immediately in the market, as any unexecuted order will get canceled.
  • Support level is the base price below which the share price of the company does not fluctuate.
  • Resistance level is the opposite of the support level, which is the highest price of the share that is taken into consideration. 
  • Stop loss is the range an investor sets. If the share goes below this value, the brokerage will automatically share the same at the price set on the stop loss.

2. Your intraday portfolio should always have two or three liquid shares, which are generally large-cap company shares recommended for squaring off the open positions. 

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3. Research the shares that are in the news and invest in them, as the increase in demand will increase the volatility of the share and may give good profits in the intraday trading session.

For example, Pharma companies’ shares were perfect for intraday trading when the government was approving vaccines for corona.

4. Investors should always have a calm, clear mind while determining the stop loss limit in share trading. Sometimes after a dip, the share price again rises to a high. But this is not conclusive, so keeping a stop loss value will automatically sell your share before going into a dip and prevent the investor from incurring a loss.

5. Vice versa, the investor should not be greedy when the share hits an all-time high in the day trading session with the mindset that it may increase some more because the chances are high that it may go south. Hence, an investor should book profit at a good profit level and exit the share with the target achieved.

6. The stock market is never predictable. Some investors do fundamental analysis while some may use technical analysis, but still, both suffer losses as these analyses are not concrete and are merely indicative. Thus, if an investor feels that there may be a rise in the stock price based on his analysis, but in reality, there is a steady decline, an investor should not wait and must sell off the share before facing a huge loss.

7. Investors in intraday should trade safely with their finances as, in the hopes of larger profits, an investor may pitch in large sums of money and end up losing the same. This has happened in the past as the stock market is said to be unpredictable. Hence, investors should only invest the money which is in surplus or would not impact their livelihood in any drastic manner.

Intraday trading tips for BeginnersKey Takeaways

  1. There are various charts to indicate the performance of the share, such as bar chart, graph chart, candlestick chart, 5-minute and 15-minute charts. Through these, investors can get an idea of the performance of a share and can trade accordingly, considering stop loss and booking of profit.
  2. Never rush in trading sessions; research the stock well and then invest in them. Some investors listen to the random tips without doing their own research of investing in shares and end up losing money. 
  3. Choose the correct reference sources for analyzing the share market.

FAQs

Q1. What are the timings of an intraday session?

The market opens at 9:30 am every morning from Monday to Friday and ends at 3:30 pm. The market remains closed on Saturdays and Sundays and public holidays.

Q2. What are the other factors which can affect intraday trading?

Investors should also keep a close watch on stocks that are under the radar of the regulating authority of the stock market (SEBI), which are inflated in price.

Q3. What happens if the intraday target is not achieved?

Many investors book the share for delivery if the target of the same is not achieved. However, this is bad practice; the investor should always ensure that they close all the open positions before the end of the trading session.

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Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. NBT do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.