Intraday Trading Guide: How to Day Trade in Indian Stock Market

Rahul’s ₹50,000 Lesson

Rahul, a 28-year-old IT professional, watched a YouTube video titled “Make ₹5,000 daily from intraday trading!” Excited, he funded his account with ₹50,000.

Day 1: Made ₹3,000. “This is easy!” Day 5: Lost ₹8,000. “Just bad luck.” Day 15: Down ₹25,000. “I need to recover.” Day 30: Account balance: ₹12,000.

Rahul lost 76% of his capital in a month.

Here’s the truth: 90% of intraday traders lose money. This article won’t promise riches. Instead, it’ll give you the knowledge to be in the surviving 10%.

What is Intraday Trading?

Intraday trading means buying and selling stocks within the same trading day. You don’t hold positions overnight.

How It Works

9:20 AM: Buy 500 shares of Tata Motors at ₹600
11:45 AM: Stock rises to ₹612
11:46 AM: Sell 500 shares at ₹612
Profit: (612-600) × 500 = ₹6,000 (before charges)

Intraday vs Delivery Trading

The Math of Leverage (And Why It’s Dangerous)

What is Leverage?

Leverage lets you trade with more money than you have.

Example: 10x leverage on ₹1 lakh capital means you can buy ₹10 lakhs worth of stock.

Leverage Calculation

Your Capital: ₹1,00,000
Leverage: 10x
Position Size: ₹10,00,000 (10 lakhs)

If stock moves 2% UP:
Profit: ₹10,00,000 × 2% = ₹20,000
Return on YOUR capital: ₹20,000/₹1,00,000 = 20%

If stock moves 2% DOWN:
Loss: ₹10,00,000 × 2% = ₹20,000
Loss on YOUR capital: 20% WIPED OUT

Reality Check: A 10% adverse move with 10x leverage = 100% loss = Account wiped.

Who Can Do Intraday Trading?

Requirements

1. Demat + Trading Account (with intraday enabled)
2. Stable Internet Connection (critical!)
3. Trading Platform (Zerodha Kite, Upstox Pro, etc.)
4. Capital: Minimum ₹25,000-50,000 (recommended: ₹1-2 lakhs)
5. Time: Full attention during market hours (9:15 AM - 3:30 PM)
6. Knowledge: Technical analysis, market understanding

Psychological Requirements

• Emotional control
• Ability to accept losses
• Discipline to follow rules
• Quick decision-making

Stocks Suitable for Intraday Trading

Criteria for Stock Selection

1. High Liquidity: Easy to buy/sell without price impact
2. High Volatility: Moves enough to generate profits
3. Tight Bid-Ask Spread: Low difference between buy/sell prices
4. High Volume: Heavy trading activity

Top Intraday Stocks on NSE (2024)

Stocks to AVOID for Intraday

• Low liquidity stocks (< 5 lakh daily volume)
• Penny stocks (high operator manipulation)
• Stocks under ASM/GSM surveillance
• Newly listed stocks (volatile, unpredictable)

Intraday Trading Strategies

Strategy 1: Opening Range Breakout (ORB)

Concept: The first 15-30 minutes create a range. Trade the breakout.

Rules:

1. Mark high and low of first 15 minutes
2. Wait for breakout with volume
3. Enter in breakout direction
4. Stop loss: Other side of range
5. Target: 1:2 risk-reward

Example: Reliance Industries

• First 15 min High: ₹2,460
• First 15 min Low: ₹2,440
• Range: ₹20

Trade:

• Buy above ₹2,462 (breakout with buffer)
• Stop loss: ₹2,438
• Target: ₹2,500

Strategy 2: VWAP Trading

VWAP: Volume Weighted Average Price – institutional benchmark.

Rules:

• Price above VWAP: Bullish bias (look for longs)
• Price below VWAP: Bearish bias (look for shorts)
• VWAP acts as support/resistance

Trade:

• Buy pullbacks to VWAP when price is above it
• Sell rallies to VWAP when price is below it

Strategy 3: Moving Average Crossover

Setup:

• Fast MA: 9 EMA
• Slow MA: 21 EMA

Rules:

• 9 EMA crosses ABOVE 21 EMA: Buy signal
• 9 EMA crosses BELOW 21 EMA: Sell signal
• Confirmation: Price action and volume

Strategy 4: Support/Resistance Breakout

Concept: Trade breakouts of key levels identified on daily charts.

Rules:

1. Identify previous day’s high, low, and close
2. Mark 52-week high/low if near
3. Trade breakout with stop below level
4. Target: Next major level

Strategy 5: Momentum Trading

Concept: Buy strong stocks, sell weak stocks.

Rules:

1. Check sector performance (Nifty Bank, Nifty IT, etc.)
2. Find strongest stock in strong sector
3. Find weakest stock in weak sector
4. Trade with the momentum

Essential Intraday Rules

Rule 1: Always Use Stop Loss

Position: ₹5,00,000
Stop Loss: 1%
Max Loss: ₹5,000

Without stop loss:
Bad trade can wipe ₹25,000+ in a flash

Rule 2: Risk Only 1-2% Per Trade

On ₹1 lakh capital, risk maximum ₹1,000-2,000 per trade.

Position Sizing Formula:

Position Size = (Capital × Risk %) / Stop Loss Distance

Example:
Capital: ₹1,00,000
Risk: 1% = ₹1,000
Stop Loss: ₹5 from entry

Position Size = ₹1,000 / ₹5 = 200 shares

Rule 3: No Averaging Down

If a trade goes against you, DON’T buy more to lower average cost. This is how losses compound.

Rule 4: Square Off by 3:15 PM

Don’t wait until 3:30 PM. Volatility increases near close. Give yourself buffer time.

Rule 5: Trade Only Liquid Hours

Best Hours: 9:30 AM - 11:30 AM, 2:00 PM - 3:15 PM Avoid: 11:30 AM - 2:00 PM (lunch lull, low volume)

Rule 6: Maximum 3 Trades Per Day

Overtrading = Over-losing. Quality over quantity.

Intraday Trading Costs

Brokerage

Other Charges (Per ₹1 Lakh Turnover)

Total Charges: ~₹50-70 per ₹1 lakh turnover (one-side)

Breakeven Calculation

Trade: Buy and Sell ₹5 lakhs worth
Total Brokerage: ₹40 (2 orders)
STT: ₹125 (sell side)
Other Charges: ~₹50
GST: ₹7

Total Cost: ~₹222

Breakeven Movement: ₹222/₹5,00,000 = 0.044%

On ₹500 stock, need to make ₹0.22 per share just to breakeven!

Common Intraday Mistakes

Mistake 1: Trading Without a Plan

“I’ll figure out what to do when market opens” = Recipe for disaster.

Solution: Write down entry, stop loss, target BEFORE entering.

Mistake 2: Revenge Trading

Lost money? Don’t immediately take another trade to “win it back.”

Solution: Step away for 15 minutes. Clear your head.

Mistake 3: Ignoring News Events

RBI policy, quarterly results, global events can cause violent moves.

Solution: Check economic calendar before trading.

Mistake 4: Over-Leveraging

Using 20x leverage on volatile stocks is gambling, not trading.

Solution: Use maximum 5x leverage until consistently profitable.

Mistake 5: Trading Against the Trend

Market falling? Don’t keep buying hoping for reversal.

Solution: Trend is your friend. Trade with it, not against.

A Typical Intraday Trading Day

6:00 AM - 9:00 AM: Preparation

• Review global market cues (US markets, Asia)
• Check stock-specific news
• Mark support/resistance levels
• Prepare watchlist of 5-10 stocks

9:00 AM - 9:15 AM: Pre-Open

• Watch pre-open prices
• Note any gaps
• Finalize 2-3 stocks to focus on

9:15 AM - 9:30 AM: Opening Range Formation

• DON’T trade immediately
• Let the range develop
• Watch volume and price action

9:30 AM - 11:30 AM: Prime Trading Hours

• Execute planned trades
• Maximum 2-3 trades
• Strict stop losses

11:30 AM - 2:00 PM: Lunch Hours

• Avoid new trades (low volume)
• Manage existing positions
• Take a break

2:00 PM - 3:15 PM: Closing Session

• Final trades if necessary
• Square off all positions by 3:15 PM
• Don’t chase last-minute trades

3:30 PM - 4:00 PM: Review

• Journal all trades
• Calculate P&L
• Note lessons learned

Intraday Trading Journal Template

Tax Implications

Intraday Trading Tax

• Classified as Speculative Business Income
• Taxed at your income tax slab rate
• Can offset only against speculative gains

Record Keeping

• Maintain all contract notes
• Keep profit/loss statements
• Required for ITR filing (ITR-3)

When Intraday Becomes Business Income

If you’re trading frequently, income tax department may classify you as a “trader” and expect business-like compliance.

Starting Capital and Realistic Expectations

Recommended Starting Capital

Realistic Returns

• Excellent trader: 3-5% per month consistently
• Good trader: 1-2% per month
• Average trader: 0% (breakeven)
• Most traders: Negative

Math: 3% monthly = 42% annually (compounded). That’s exceptional!

Should You Do Intraday Trading?

It’s For You If:

• You have capital you can afford to lose
• You can dedicate full market hours
• You’re emotionally disciplined
• You’ve practiced extensively on simulators
• You have a proven strategy

It’s NOT For You If:

• You can’t afford losses
• You have a full-time job requiring attention
• You’re doing it for quick money
• You haven’t studied technical analysis
• You get emotional about money

Action Steps for Aspiring Intraday Traders

1. Month 1-2: Learn technical analysis thoroughly (free resources available)
2. Month 3: Paper trade (TradingView paper trading)
3. Month 4-6: Trade with small capital (₹10,000-25,000)
4. Month 7+: Gradually increase capital if consistently profitable

Reality Check: Expect to spend 6-12 months in learning phase. If someone promises quick results, they’re lying.

Risk Disclaimer

Intraday trading involves substantial risk of loss. Leverage can amplify gains and losses. The majority of intraday traders lose money. This guide is for educational purposes only and does not constitute trading advice. Only trade with money you can afford to lose. Consider consulting a SEBI-registered advisor.

Summary

Intraday trading is:

• Not easy money – Most traders lose
• Capital intensive – Need proper capital to survive
• Time intensive – Requires full attention during market hours
• Skill intensive – Requires months of learning

If you still want to proceed:

1. Learn first, trade later
2. Risk only what you can lose
3. Use strict stop losses
4. Keep a trading journal
5. Be patient with yourself

Social Media Posts

LinkedIn: “90% of intraday traders lose money. The remaining 10%? They spent months learning before risking capital. There are no shortcuts in trading. If you’re starting out, spend 3 months paper trading before using real money. Your future self will thank you. #Trading #Investing”

Twitter/X: “Intraday Trading Reality: ❌ ‘Make 5k daily easily’ ✅ 90% lose money first year ❌ ‘Trading is easy’ ✅ Requires months of learning ❌ ‘Just follow tips’ ✅ Need your own strategy

Still want to trade? Learn first. #IntradayTrading #StockMarket”

Instagram: “Me: ‘I’ll make quick money in intraday trading!’ Reality: Lost 50% in first month 😭

What nobody tells you: • 90% traders lose money • Takes 6+ months to learn • Need emotional discipline • No guaranteed returns

Learn from my mistake. Study before you trade! 📉 #TradingTips #StockMarket”