How to Start Intraday Trading in India? Everything Beginners Need to Know

Intraday trading has captured the attention of Indian retail investors looking to profit from the stock market’s daily price swings. The concept sounds straightforward enough: buy a stock and sell it before the market closes, pocketing the difference as profit.

What beginners often don’t realize until they start trading real money is how much this simple concept demands in execution. The potential to earn fast returns exists, but so does the potential to lose money faster than most other investment approaches. Understanding the nuances, risks, and strategies involved separates those who succeed from those who lose capital in their first few months.

What is Intraday Trading?

Intraday trading means buying and selling shares within the same trading session, where you close every position before the market shuts for the day. Unlike delivery trading, where you hold stocks overnight or longer, intraday trades avoid the risk of adverse news or events affecting your positions when markets are closed.

In India, the Securities and Exchange Board of India (SEBI) regulates this activity, including setting margin rules and requiring an auto square-off system. That system automatically closes all open positions before market close if you haven’t done so yourself, preventing overnight exposure that could create losses beyond what your account can handle.

This regulatory framework exists because intraday trading involves leverage because you’re typically trading with more money than you’ve actually deposited. While leverage amplifies gains, it equally amplifies losses, making the auto square-off system a safety mechanism rather than an inconvenience.

How to Get Started with Intraday Trading in India

You’ll need a trading account with a SEBI-registered broker who offers margin facilities and a platform like Dhanush by Ashika that won’t freeze during volatile market moments when every second matters.

Many brokers now provide seamless account opening with paperless KYC verification, integrating trading and demat accounts so you’re not juggling multiple logins and interfaces. But choosing a broker based solely on ease of account opening misses what actually matters: platform stability during high-volume periods, execution speed, and customer support when things go wrong.

Setting up your technology toolkit comes next. Live market scanners help you spot stocks moving significantly. Charting applications let you analyse price patterns and technical indicators. Alert systems notify you when stocks hit predetermined price levels. Without these tools, you’re essentially trading blind, relying on delayed information while others act on real-time data.

Essential Intraday Trading Strategies for Beginners

Starting simple matters more than starting sophisticated. Several strategies work for beginners willing to master them before moving to advanced approaches:

Scalping: Quick trades capturing small price moves, often repeated multiple times throughout the trading day. This strategy requires intense focus and fast execution.

Momentum Trading: When a stock starts moving with conviction, momentum traders jump aboard for the ride, exiting before momentum fades. The trick lies in distinguishing genuine momentum from temporary spikes that reverse quickly.

Breakout Trading: Buying or selling when a stock breaks through key support or resistance levels. These levels act like psychological barriers, when price breaks through with volume, it often continues in that direction as stop-losses trigger and new positions open.

Range Trading/Reversal: Profiting from stocks bouncing between established price ranges. Some stocks trade in predictable ranges for days or weeks. Range traders buy near support, sell near resistance, capturing the oscillation until the range breaks.

Technical indicators guide your entry and exit timing. Volume Weighted Average Price (VWAP) shows whether you’re buying above or below the average price, helping you avoid chasing expensive entries. Relative Strength Index (RSI) indicates overbought or oversold conditions. Moving averages smooth out price action to reveal underlying trends.

Volume analysis confirms price moves where rising prices on increasing volume suggest strength and rising prices on declining volume often precede reversals. Ignoring volume while focusing solely on price patterns creates blind spots that may lead to losing trades.

Brokerages, Charges, and Taxation

Intraday trading in India attracts specific costs that eat into profits if you’re not careful. Brokerage fees per executed order or calculate as a percentage of trade value, varying by broker. Discount brokers charge flat fees while full-service brokers take percentages. However, understanding your costs matters for calculating realistic profit expectations.

Discover the complete list of all possible charges and enjoy a hassle-free investment experience with Dhanush.

Beyond brokerage, you’ll pay Securities Transaction Tax (STT), Goods and Services Tax (GST), stamp duties, and exchange transaction charges. These accumulate quickly on frequent trading, turning seemingly profitable days into break-even or losing days after accounting for all costs.

Taxation treats intraday profits as speculative business income, taxed according to your income tax slab rather than at capital gains rates.

Common Mistakes to Avoid

Beginners often overlook risk limits and skip using stop-losses, leading to outsized losses.

Trading based on rumors, tips, or social media buzz without independent research may also cost you more capital than market downturns.

Trying to trade too many stocks simultaneously dilutes focus and increases the mental load during fast-moving markets.

Overleveraging and ignoring transaction costs create an illusion of profitability until you calculate actual returns after all charges. Many traders show gross profits but net losses once you account for every cost involved.

Conclusion

Intraday trading offers genuine profit opportunities for those who approach it with proper knowledge, tested strategies, and consistent discipline.

Also, make sure to follow SEBI’s regulatory updates and reputed market analysis reports to stay informed about rule changes and market developments that affect your trading. Understanding the regulatory environment helps you avoid compliance issues while protecting yourself from unscrupulous operators.

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