Engaging in stock market trading demands strategic decision-making, keen market observation, and timely execution of buying and selling. If you are keen on knowing the basics of Intraday trading in India, this article will serve as a great guide. Intraday Trading in India For Beginners can be easy with the right set of knowledge. Read on for some meaningful insights!
Understand What is Intraday Trading?
Intraday trading in India is also called “within-the-day” trading. This trading refers to the practice of executing trades within the market hours of a single day. It involves identifying stocks that are assured to move either upwards or downwards. In the case of an anticipated upward movement, a trader buys at a low price and sells at a higher price.
Alternatively, if a stock is expected to fall, a trader might go for short selling. Short selling refers to selling at a higher price and buying at a lower price. Successful intraday trading relies on a keen understanding of market behavior and timely decision-making.
Also Read: Best Stock Trading Platforms in India
Distinguishing Intraday Trading India from Regular Trading
A fundamental difference between intraday trading in India and regular trading lies in stock delivery. In intraday trading in India settled within the same day, regardless of profit or loss, before the market closes.
In contrast, regular trading allows for longer-term investment. The trader can choose to invest for a longer period; thus, trade settlement occurs over a few days. This trading majorly depends on the category of the stock.
Additionally, while intraday trading in India does not involve a change in ownership of shares, regular trading consists of a transfer of ownership from the seller to the buyer. The shares are held in a Demat account post-settlement.
It is generally noted that Intraday Trading in India For Beginners greatly depends on choosing the right means and tools to carry trades. Since beginners lack knowledge of these details, they lose in trading.
Essential Guidelines for Successful Intraday Trading in India For Beginners
When you look up how to start intraday trading in India, many things will come up. Some of the key factors of intraday trading are mentioned below
1. Know When to Enter and When to Exit
Intraday Trading in India For Beginners is essentially about knowing when to enter and exit. One of the best ways is to align your trades with prevalent intraday trends. They offer low-risk entry opportunities and higher gain potential if the trend persists.
Knowing when to exit involves two conditions. Either reaching the target profit or attaining a predefined maximum loss threshold. Once you have accomplished your estimated profit, you can choose to exit. One can easily devise effective entry and stop-loss strategies if one can successfully identify these patterns.
2. Having a Stop Loss
Incorporating a stop-loss mechanism safeguards against adverse outcomes. It is an exit strategy if the trade does not unfold as expected. Additionally, when your profit expectation comes true, you must establish multiple target levels. The different target levels include T1, T2, etc., so you can exit at various points per your profit.
3. Consider Historical Returns
One rule of thumb for Intraday Trading in India For Beginners or even for experts is to take inspiration from history. While not all stocks and tradings repeat the same path, it is noticed that most stocks usually do.
Therefore, drawing from historical performance, focus on stocks that preserve capital and offer controlled-risk returns. Analyze trends and characteristics before initiating trades. One key priority should be choosing liquid stocks with high average daily volumes for ease of entry and exit.
4. Minimize Impulsivity
As a beginner who has recently learned how to start intraday trading in India, one can make impulsive decisions. One must use historical analysis to find well-defined trading strategies and make it an opportunity for successful trading.
Also, having a well-defined profit and stop-loss threshold is highly recommended for successful Intraday Trading in India For Beginners. Once an effective entry and exit strategy is devised, avoid altering it mid-trade, maintaining focus and control for successful outcomes.
5. Begin with Small Steps
While early successes can boost confidence, starting cautiously with 1-2 stocks minimizes risk during the initial phase. One of the best tips on how to start intraday trading in India is to start with low volume and value.
Gradually increasing trade volume as experience and risk tolerance grow is the best way to go. Learning from mistakes makes gaining a deeper understanding of market dynamics easier.
6. Steer Clear of Penny Stocks
Penny stocks may look tempting due to their high yields, but they are not the ones to be rushed into. They are highly volatile, which may lead to huge losses.
One of the golden tips for Intraday Trading in India For Beginners is to stay away from penny stocks till you are well-versed in the strategies. You start analyzing trends and managing associated risks as you learn and grow with time.
7. Maintain Composure
Intraday Trading in India For Beginners can be intimidating. With an agile market and active market monitoring, one is doomed to fall into the pits of anxiety. However, once you get over that phase and start basing your decisions on logic, you will feel calmer.
One thing to note in intraday trading in India is to keep emotions such as fear and greed at bay if you want to be successful. Keeping a calm and composed mindset for informed trading actions helps.
Steps to Start Intraday Trading in India for Beginners
Now that we have covered the basic guidelines for how to start intraday trading in India, let’s learn how to start intraday trading in India for beginners.
Intraday trading offers a chance to capitalize on short-term market movements. Here’s a simple step-by-step guide to help beginners start intraday trading in India.
Open a Trading Account
Choose a discount broker like Zerodha, Angel Broking, or 5Paisa. They offer user-friendly platforms for intraday trading.
Ensure your trading account has sufficient funds for trading. Margin is the minimum required amount, which varies from a regular trade to an MIS (Margin Intraday Square off).
Build a Watchlist
Select stocks/assets you want to trade for the day. Create a watchlist to focus on chosen assets, maximizing trading opportunities. This is an important step as having an idea about the selected stocks helps us to buy stocks that give maximum profits.
Place Your Trade
Choose a stock from your watchlist and enter the trade details. Use market or limit orders. A market order executes at current prices, while a limit order lets you set your price.
Select Order Type
Choose between a normal or MIS (Margin Intraday Square off) order. MIS offers higher leverage but requires specific margins.
Check Order Status
The last and most important step is to check your trading status. You can monitor your trades in the order book. Keep track of placed, executed, and canceled orders.
As an extra step, one should regularly observe market movements and trade opportunities. Implement stop-loss to protect your trades.
The most important thing to remember for a beginner in intraday trading is to be vigilant, have disciplined risk management, and be willing to learn continuously. Start small, focus on a few assets, and gradually refine your strategies for a rewarding trading experience.
Exploring Alternatives to Intraday Trading India
As mentioned, Intraday Trading in India For Beginners can be tricky due to high stress and market agility. But fret not; you can look at the following few alternatives to explore in the meantime:
Involves multi-day or multi-week investments, suitable for diversification.
Focuses on longer-term investments based on fundamentals and a company’s real value. This type of investing requires patience but offers huge potential in terms of earning possibilities.
This type of trading uses machine learning and advanced algorithms to recommend stocks based on an investor’s risk appetite.
Intraday trading could be challenging, but this guide is a good start to Intraday Trading in India For Beginners. Remember, it’s not for everyone in the stock market.
If you’re curious, dive deeper into this type of trading. See if it matches your financial goals and risk tolerance. Start with small trades to play it safe and get a grip on the basics of technical analysis. It’s like learning the ropes before swinging on the trapeze.
But here’s the scoop if you’re looking for stock market benefits without the constant hustle, consider investing instead of trading. It’s like planting seeds and watching them grow. Assess stocks based on the basics and hold onto them for the long haul. No matter your choice, whether you’re leaping into trading or are comfortable with investing, preparation is key.
How to Start Intraday Trading in India for Beginners – FAQs
Is intraday trading good for beginners?
Ans. It highly depends on the timing, strategy, and historical data analysis of anyone to be successful in intraday trading.
How much can an Intraday trader earn on average in India?
Ans. One can earn up to a lakh or even more depending on their trading skill.
How to start intraday trading if you are a beginner
Ans. Learn from the statistics, data, and all the resources available on Intraday Trading in India For Beginners before diving into it.