What Is Intraday Trading? Beginner-Friendly Breakdown

If you’ve ever looked at the stock market and wondered how some traders buy and sell within the same daythen you are welcome to the world of intraday trading. Unlike traditional investing, where people hold stocks for months or years, intraday traders aim to profit from daily price movements.

This guide breaks down what intraday trading is, how it works, and what beginners should know before starting investing money on the platform.

Intraday Trading Meaning

Intraday trading refers to buying and selling financial instruments—like stocks, currencies, or commodities—within the same trading day. The position must be squared off before the market closes.

Example:

• A trader buys shares of TCS at 10:10 AM

• Sells them at 1:45 PM the same day
  That is intraday trading.

Here the traders doesnt hold his share overnight, which means traders avoid overnight market risks.

Why Do People Choose Intraday Trading?

Intraday trading attracts traders for several reasons:

Short-Term Profit Opportunities

Stock Prices fluctuate throughout the day and a skilled traders try to capture small gains whenever they expect increase in a price of share on the same day.

No Delivery Holding Charges

Unlike delivery-based trading, intraday does not require demat-based settlement.

Margin Leverage

Brokers often provide leverage, allowing traders to buy more with less capital. However, leverage also increases risk.

How Intraday Trading Works

Here’s the general process:

1. Choose a stock that you want to invest preferably like a liquid, volatile, and backed by news or events or financial metrics.

2. Mark entry and exit levels
   This includes both target price and stop-loss.

3. Place an intraday order
   Usually marked as MIS (Margin Intraday Square-off) or Intraday order type.

4. Square off
   Sell if you bought, or buy if you shorted, before market close.
   If not squared off manually, brokers usually close the position automatically near market close.

Key Tools Intraday Traders Use

1. Technical Analysis

Charts, indicators, and price patterns such as:

• Moving Averages

• RSI (Relative Strength Index)

• MACD

• Support and Resistance

2. Intraday Charting

Common timeframes include:

• 1-minute

• 5-minute

• 15-minute charts

3. Market News and Events

Events that influence price momentum include:

• Earnings results

• Fiancen news
• Market Trends

• Government policies

• Interest rate decisions

• Global market cues

Intraday Trading vs Delivery Trading

Who Should Consider Intraday Trading?

Intraday trading may be suitable for individuals who:

• Can monitor markets during trading hours

• Understand price movements and charts

• Is capable of understanding the market sectors

• is capable of taking monetary risk and avoid emotional decisions

It is not ideal for those who prefer passive investing or cannot actively follow the market.

Risks in Intraday Trading (Beginners Must Know)

Intraday trading carries significant risks:

High Volatility

Prices move quickly, and losses can accumulate fast.

Margin Risk

Leverage amplifies both profits and losses.

Emotional Trading

Fear and greed often result in poor trading decisions.

Risk Management Tips for Beginners

1. Always use stop-loss to limit downside risk.

2. Avoid illiquid stocks as they are hard to enter or exit.

3. Follow a clear strategy instead of impulsive trades.

4. Risk only a small percentage of capital per trade (commonly 1–2 percent).

5. Practice using paper trading before using real money.

Final Thoughts

Intraday trading offers opportunities for quick profits but comes with higher risk and requires skill, discipline, and research. For beginners, it is advisable to start small, learn technical analysis, and focus on risk management rather than chasing fast returns.

If your goal is long-term wealth, consider combining intraday trading with delivery-based investing or index investing for better balance.