Intraday Trading Guide for Beginners

Most investors who started decades ago and have become successful in the stock markets are long-term investors. In the past, the stock market followed an open outcry system that did not have technology backed investing platforms and widespread financial tools for detailed analysis. Hence, long-term investing was the default tool to create wealth through equity investments. However, the recent technological revolution in the Indian financial market has given rise to extremely short-term investments in trading, establishing Intraday trading as one of the most popular types of trading methods.

What is intraday trading?

Intraday trading is a form of ultra-short-term trading technique that requires the trader to buy and sell securities or other financial instruments on the same day. Intraday trading involves squaring off all the open positions before the closure of the market on the day the securities are bought. Intraday trading doesn’t involve any change in the ownership of the securities. Intraday trading was largely a domain of financial companies and professional traders, but with the advent of electronic and margin trading, even novice investors can opt for intraday trading.

How is intraday trading different from regular trading?

The biggest difference between intraday trading and regular trading (delivery trading) is the transfer of the ownership of the shares. Intraday trading doesn’t involve the transfer of shares as you have to square off all the positions within a day. Regular trading involves the delivery of shares where after T+2 days, the shares reflect in your Demat account online. Regular trading allows you to hold on to the shares for the long term. However, intraday trading mandatorily requires the liquidation of shares before the market closes for the day.

Should you participate in intraday trades?

Intraday trading sounds enticing, with a significant amount of money to be made within a short period. However, intraday trading could lead to huge losses without the right risk mitigation strategies. Moreover, to get positive returns through intraday trading, you have to follow the market closely and track every movement. If you can take risks and monitor market movements daily, only then you should opt for intraday trading. Furthermore, you should garner deep financial knowledge before entering Intraday trades.

How to start with intraday trading?

  • You need to have a suitable stockbroker to open Demat accounts online with zero opening charges with the required technological support.
  • The stockbroker should provide access to advanced charting tools and research reports as they are vital in generating profits and mitigating losses.
  • Intraday trading requires multiple trades in a day, so choosing a broker that charges minimal brokerage is important.
  • After opening the Demat account online, you have to shortlist the stocks you can trade as Intraday.
  • The stock selection in the case of intraday trading and regular trading is different. Intraday positions have to be squared off within the market hours.
  • If you have a stock with low liquidity, you may get stuck, leading to a loss. Hence, you should choose stocks with adequate liquidity like shares of blue-chip companies for intraday trading.

When to trade?

Similar to the stock selection, the timing of intraday trading is critical for generating profits. If you initiate an Intraday trade at the wrong time, you may not be able to make money from your trades. The market is extremely volatile, so one should avoid taking large positions just after the opening of the market.

Why intraday trading?

While the investing strategy depends entirely on the investor’s risk appetite and capital availability, intraday trading has some unique advantages. For starters, the margin provided by the stockbroker for intraday trading is substantially higher than in other segments. With more leverage, you can take bigger positions and increase the overall profit potential. Generally, stockbrokers charge lower brokerage for intraday trades as the frequency of trades is high.


Intraday trading can be a rewarding experience if done with proper research. One needs short to medium term strategies to gain through intraday trading. You can opt for an IIFL Demat and trading account and get started with intraday trading. IIFL Demat and trading account provide advanced analytics and access to quality research, which can help immensely in day trading and allow you to earn hefty profits in the process.