Introduction: The Fast-Paced World of Intraday Trading
Imagine buying a stock at 10 AM for ₹100 and selling it by 3 PM for ₹110—earning ₹10 per share in just a few hours. That’s intraday trading—a thrilling but risky way to profit from short-term market moves.
But how does it actually work? Can beginners try it? And what are the dangers? Let’s break it down.
What Is Intraday Trading?
Intraday trading (day trading) means buying and selling stocks on the same day.
- All positions must be closed before the market closes.
- No holding stocks overnight (unlike long-term investing).
Key Features:
✔ Short-term focus (minutes to hours).
✔ Uses leverage (borrowed funds to amplify gains/losses).
✔ Requires quick decisions (no time to wait for recovery).
How Does Intraday Trading Work?
Step-by-Step Process:
- Open a Trading Account (Zerodha, Upstox, Groww).
- Select a Liquid Stock (high volume, e.g., Reliance, TCS).
- Place Buy Order (e.g., 100 shares of Tata Motors at ₹500).
- Set Target/Stop-Loss (e.g., Sell at ₹520 or ₹480).
- Square Off Before 3:30 PM (sell to lock in profit/loss).
Example Trade:
- Buy: 10 shares of Infosys at ₹1,500 (Total = ₹15,000).
- Sell: Same day at ₹1,530 (Profit = ₹300, +2%).
Why Do People Do Intraday Trading?
Pros:
✅ Quick Profits – Earn in hours vs. years (long-term investing).
✅ Leverage – Brokers offer 5x–10x margin (trade more than your capital).
✅ No Overnight Risk – Markets can’t gap down while you sleep.
Cons:
❌ High Risk – Leverage magnifies losses too.
❌ Stressful – Requires constant screen time.
❌ Brokerage & Taxes – Frequent trades = higher costs.
Intraday vs. Delivery Trading
| Feature | Intraday Trading | Delivery Trading |
|---|---|---|
| Holding Time | Same day | Days/months/years |
| Leverage | Yes (5x–10x) | No (pay full amount) |
| Risk Level | Very High | Moderate |
| Best For | Traders | Investors |
Common Intraday Trading Strategies
1. Scalping
- Goal: Profit from tiny price changes (₹1–₹2 per trade).
- Example: Buy 1,000 shares of SBI at ₹600, sell at ₹601.
2. Momentum Trading
- Goal: Ride trending stocks (news-driven rallies).
- Example: Buy a stock surging 5% early, exit before pullback.
3. Breakout Trading
- Goal: Buy when stock crosses resistance (or sell at support breaks).
Who Should Avoid Intraday Trading?
❌ Beginners – Start with long-term investing first.
❌ Risk-Averse Investors – High chance of losing capital.
❌ Those Without Time – Needs constant monitoring.
How to Start Intraday Trading Safely?
- Learn First – Study candlestick patterns, support/resistance.
- Start Small – Use only risk capital (money you can afford to lose).
- Use Stop-Loss – Automatically exit if trade goes against you.
- Avoid Overtrading – Stick to 1–2 trades/day.
Final Takeaways
✔ Intraday = Buy & sell stocks within the same day.
✔ High-risk, high-reward – Leverage can amplify gains/losses.
✔ Best for experienced traders – Beginners should practice first.
✔ Always use stop-loss – Protects from huge losses.
A note on leverage and tax (2025 update)
Two things beginners often get wrong: leverage and tax. Since SEBI’s peak-margin rules came into full effect in 2021, brokers can no longer offer the very high 10x–20x intraday leverage of the past — intraday margins are now much tighter. And intraday equity profit is treated as speculative business income, taxed at your income-tax slab rate (not as short-term capital gains). Factor both in before you trade.
Related guides
- What time does the Indian stock market open?
- How to read a stock quote on the NSE
- What is a share? Explained simply
- Why long-term investing beats trading for most people
Frequently asked questions
Is intraday trading good for beginners?
Generally no. Intraday trading is high-risk and needs experience, discipline, and constant screen time. Beginners are usually better off learning long-term investing first and treating any intraday activity as small, high-risk experimentation.
How is intraday trading taxed in India?
Profit from intraday equity trades is treated as speculative business income and taxed at your income-tax slab rate, not as capital gains. Frequent trading also means higher brokerage and transaction costs.
How much money do I need to start intraday trading?
You can technically start with a few thousand rupees, but only use money you can afford to lose. Always trade with a stop-loss and limit yourself to one or two positions while learning.
Prashant Thakur is the founder of SavesToGrow.com. He is not a financial advisor — he's a self-taught personal-finance enthusiast who learned to budget, save consistently, and invest from scratch, and now shares those hard-won lessons in plain, jargon-free English. Every guide is researched from primary sources such as the Income Tax Department, SEBI, RBI and AMFI, and reflects real, first-hand experience. Nothing on this site is professional financial advice — always do your own research or consult a SEBI-registered advisor before making money decisions.
