Intraday trading is the first thing that excites most beginners who enter the stock market. Screenshots of impressive daily profits, fast-moving price charts, and the thrill of same-day buying and selling often attract new traders into the market.
But intraday trading is not as simple as it appears—while high profits are possible, so are heavy losses. Understanding the mechanics, advantages and risks is essential before placing your first intraday order.
1. What Is Intraday Trading?
Intraday trading (also written as Intraday) refers to:
Buying and selling a stock on the same trading day.
- Market opens: 9:15 AM
- Market closes: 3:30 PM
If you buy at 9:30 AM and sell at 2:30 PM, that is intraday trading.
If you hold beyond 3:30 PM, it becomes positional or swing trading.
The objective is simple:
Buy at a lower price → Sell at a higher price → Book profit
or
Sell first at a higher price → Buy later at a lower price → Book profit
Intraday trading is done strictly for income generation, not wealth creation.
2. What Makes Intraday Trading Special? — Leverage
The biggest feature that makes intraday trading different from long-term investment is leverage.
Leverage = Extra money your broker gives you to trade.
Example:
If your broker offers 5x leverage and you have ₹1,000:
You can trade using ₹5,000 worth of stock.
How leverage boosts profit:
- Real capital: ₹1,000
- Price rises from ₹1,000 → ₹1,010
- Without leverage: Buy 1 share → ₹10 profit
- With 5x leverage: Buy 5 shares → ₹50 profit
Same stock movement, 5 times higher profit.
But leverage is a double-edged sword.
If price drops:
- Loss increases 5 times
- Your entire day’s capital can vanish quickly
That’s why intraday trading requires skill, discipline and risk management.
3. Why Do Brokers Provide Leverage?
A common beginner question:
“Why do brokers give so much extra money for free?”
Because for them, intraday trading is safe:
- You tell the broker upfront that your trade will be closed the same day.
- If you don't close before market closing, the broker auto–squares off your position.
- Broker earns more brokerage because leverage increases buying power.
- More traders = more transactions = more brokerage revenue.
So leverage is a mutually beneficial system—but potentially dangerous for the trader.
4. Short Selling – Making Money Even When Stocks Fall
This is one of the most powerful advantages of intraday trading.
Short Selling = Sell first → Buy later
You can profit from a falling stock.
Example:
- At 11:00 AM, stock is ₹990
- You expect it to fall
- You sell 5 shares (using leverage)
- At 2:00 PM, price drops to ₹960
- You buy back the 5 shares
Profit = ₹30 × 5 = ₹150
How is it possible to sell something you don’t own?
Because:
- The actual exchange of shares happens only after 3:30 PM during settlement.
- When you “sell” at 11 AM, the exchange matches your order with a buyer.
- When you “buy” later, the shares are arranged accordingly.
- At settlement time, everything gets matched properly.
This mechanism enables short selling legally and safely.
5. Advantages of Intraday Trading
1. Leverage allows higher potential profits
You trade with more capital than you have.
2. You can earn in both rising and falling markets
Thanks to short selling.
3. No overnight risk
Global events, crashes and unexpected news cannot harm your held positions because you close everything the same day.
4. Convenience and flexibility
Trade from anywhere with just a phone or laptop.
5. Daily cash flow
Profits come as real cash immediately, unlike long-term investments where gains stay unrealized for years.
6. Disadvantages and Risks of Intraday Trading
1. Leverage can destroy capital
Losses amplify as quickly as profits.
2. Very high failure rate
About 95–99% of intraday traders lose money.
Lack of knowledge, discipline, and planning are the main reasons.
3. Mentally exhausting
Watching price charts for hours is stressful.
Your mind stays alert, tense, and emotionally charged the whole session.
Intraday trading is simple to understand but extremely difficult to execute profitably without structured learning.
7. How to Start Intraday Trading
To begin:
Step 1: Open a Demat + Trading Account
Choose a reliable broker (Zerodha, Upstox, FYERS, etc.).
Step 2: Enable Intraday Order Types
Such as MIS, CO, BO, etc. (your broker enables these automatically).
Step 3: Learn the basics
Candlestick charts, patterns, indicators, support/resistance, stop-loss usage.
Step 4: Practice with small capital
Start with ₹2,000–5,000 until you gain confidence.
8. How to Measure Intraday Performance Correctly
Many beginners say things like:
- “I made ₹1,000 today.”
- “I made ₹5,000 in one trade.”
These numbers mean nothing without context.
The correct way to measure performance is:
ROI = (Profit ÷ Capital Used) × 100
Example:
- Profit: ₹50
- Capital used: ₹1,000
- ROI = 5%
Professionals always evaluate trades in percentage return, not absolute money.
9. How to Make Big Profits in Intraday Trading
There is only one answer:
Learn deeply → Practice consistently → Trade with discipline
Successful intraday traders follow a system:
- Clear strategy
- Defined entry & exit rules
- Strict stop-loss
- No emotional decisions
- Proper position sizing
With time, learning, and consistency, intraday trading can be profitable.
Final Thoughts
Intraday trading looks exciting, but it requires:
- Skill
- Patience
- Emotional control
- Technical understanding
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