What Is Intraday Trading and Its Strategies?

When we hear the word trading, most of us imagine buying something and holding onto it for a while before selling it for profit. But intraday trading flips that idea. In this type of trading, everything happens within the same day.

What Is Intraday Trading?

Intraday trading, also known as day trading, is when you buy and sell shares or other financial instruments within the same trading day. That means all your positions are squared off before the market closes for the day. You don’t hold anything overnight.

Let’s say you buy 100 shares of a company at 10:15 AM. If the price goes up by noon and you sell those shares before the market closes (usually 3:30 PM in India), that’s intraday trading.

The aim is To make quick profits from small price changes during the day.

Benefits of Intraday Trading?

• Quick Returns: If you’re good at spotting price movements, you can make profits in hours or even minutes.

• No Overnight Risk: You don’t have to worry about global news or events affecting your stock prices the next day.

• Lower Margin Needed: Brokers often offer higher leverage for intraday trades, which means you can trade with less money upfront.

Intraday Trading Strategies :-

Here are a few popular strategies that intraday traders use:

1. Momentum Trading

This strategy is about riding the wave. If a stock is gaining fast because of some news or event, traders jump in to ride the momentum. But you need to act quickly—these moves don’t last long.

Example: If a company reports strong earnings, its stock might rise sharply. A momentum trader will try to catch that upward move and exit before the excitement fades.

2. Breakout Trading

This happens when a stock breaks out of a set price range—either going higher or lower. Traders use support and resistance levels (basically price zones where the stock tends to stop or reverse) to watch for breakouts.

Tip: Once a stock crosses a key level with good volume, it often continues in that direction for some time.

3. Scalping

This is like rapid-fire trading. Scalpers make dozens or even hundreds of trades in a day, grabbing tiny profits from each. It’s fast, intense, and not for the faint-hearted.

Note: Even small price changes can mean big profits if repeated multiple times.

4. Reversal or Pullback Trading

Sometimes stocks move too fast in one direction. Smart traders look for signs that the price may “reverse” or pull back. They then enter the trade in the opposite direction.

Caution: Timing is key here. Getting in too early or too late can turn the trade against you.

5. Gap Trading

This involves trading stocks that “gap up” or “gap down” in price at the market open. These gaps usually happen because of after-hours news or results. Traders watch for whether the gap will continue or get filled.

A Few Reminders:-

• Always Use Stop Loss: This is a must. It helps limit your losses if the trade doesn’t go your way.
• Don’t Be Greedy: Take profits when your target is hit. Waiting too long can turn a winning trade into a losing one.
• Practice First: Use demo accounts or paper trading before putting in real money.
• Stay Updated: Keep an eye on news, earnings, and global events - they move markets.

Final Thoughts :-

Intraday trading can be exciting, but it’s not as easy as it looks. It takes practice, discipline, and a clear strategy. Start small, stay calm, and always manage your risks.

And remember - every successful trader was once a beginner. Happy trading!