Getting Into Intraday Trading? Here Is What You Must Know

intraday trading

Intraday trading is a skill that is supposed to be learned over time. No one becomes a successful trader overnight. It is similar to setting up a new business. Just like setting up a new business takes time, traders take time to master their skills. Earlier, people never considered trading as a full-time profession. Especially in households, trading was considered as gambling. However, the tables have turned and now people have started accepting trading as a full-time career option. 

What Is Intraday Trading? 

Intraday trading is when the financial instruments are bought and sold for a day before the market hours. Traders take positions according to the stop loss and take profit targets. Now the intraday trading feature on the trading app has made it easier for traders. Even if the trader forgets to square off the position, the broker automatically closes the position or converts it into a delivery position. 

New-age brokers that provide online trading accounts have immensely participated in the growth of this segment. The ease of opening a demat and trading account has increased retail participation in the intraday trading space. 

Basics Of Day Trading 

Beginners in the day trading space should know that it is a risky method. Intraday trading is riskier than swing/positional trading. The majority of the time traders need to place strict stop losses while trading on an intraday basis. It protects them from losing their capital and the very first rule of trading is to never lose the entire capital. It is okay to hit a stop loss in one or two trades. Accepting losses is one thing that day traders need to understand quickly but most importantly, they have to protect their capital. 

The remaining capital can be used to cover up the losses. 

How To Select Stocks For Intraday? 

1. Highly Liquid Stocks 

Day traders trade on small profit margins but large quantities. In the case of options trading, day traders need to book profits within a fraction of seconds. Liquid stocks fluctuate as per the market conditions and traders need to take advantage of the fluctuation. Even a one percent fluctuation in-stock can let traders make a huge amount of profit. 

2. High Volume Stocks 

The stocks with high volume are a better choice for online intraday trading. A high volume in stock indicates excess demand or supply. Either of them is an added advantage to the day trader. 

3. Strong Correlation 

It is better to choose a stock that has a stronger correlation with the index. It becomes easier to predict the stock movement. A high correlation between the index and the stock is always better. 

Things To Focus On 

1. Stick To The Trading Plan 

Every successful trader has a trading plan. Sticking to a trading plan is very important. For instance, according to your trading plan, the risk-reward ratio for the trade is 1:2. This means you are ready to take a risk of 1% to gain 2% on the trade. If you hit 1% stop loss, then immediately get out of the trade and close the position. Do not wait for the stock to give you one more chance. 

2. Trade With The Gamble Money

Gamble money is a term used for those funds that people take into casinos. Traders need to use the money that they can afford to lose. The best way is to trade from the profit amount. It has multiple benefits, the biggest one is that traders do not think twice before taking a risk. 


There are many other factors that day traders need to consider however, the most important is to never trade without a stop loss. Stop loss is the easiest way to save capital. More than saving the capital, it defines the discipline of the trader. It separates a winning and a losing trader. 

Also read:- Commodity market analysis

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