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Intraday Trading Tips, Strategies & Basic Rules - Explained

  •  6 min read
  •  27,544
  • Updated 22 Jul 2025
Top Strategies & Tips for Intraday Trading

Intraday trading means buying and selling financial instruments within the same day, aiming for short-term profits from market fluctuations. You do not hold positions overnight; instead, you square off before the market closes.

This type of trading relies on quick decision-making and analysing market trends within a day. You need to be alert, adaptable, and well-versed in technical analysis to succeed. If you are looking for tips to enhance your trading approach, you have come to the right place!

The traditional rule of thumb for intraday trading is not to risk more than 2 percent of your capital on one trade. Moreover, the risk of ignorance is greater than the market risk itself, especially for beginners. So, make sure you:

  • Choose liquid stocks

Intraday trading involves buying and selling a set of shares on the same day before market closing, i.e., squaring off open positions. However, for the stock exchange to execute these orders, there must be enough liquidity in the market.

Thus, the first tip is to avoid small-cap and mid-cap stocks that may not be liquid enough. Otherwise, there is a high probability that your squaring off order may not get executed, forcing you to take delivery instead.

Stocks with high liquidity trade at huge volumes, which allows intraday traders to buy or sell larger quantities at ease. Further, avoid investing all your trading money in a single stock. Experts recommend diversifying your intraday positions across a handful of stocks. Diversification will help you balance your intraday trade strategy and minimise your risk.

  • Freeze the entry and exit price

In intraday, the price movements in a single day can make investors doubt their initial decision. In this case, all you need to do is decide the entry and exit price before taking a position. This ensures that you have an objective view and know the levels at which you will be buying or selling your trades. You must know how to strategically plan your entry and exit without letting your emotions rule your decisions.

  • Always set a stop-loss level

Let’s understand this with an example. Say you are an intraday trader. XYZ Ltd is trading at ₹550 per share, and you expect the share price to rise today. You decide to buy 100 shares of XYZ Ltd by investing ₹55,000.

But instead of going up, the price goes down to ₹500 per share. Within a matter of hours, you bear losses of a total ₹5,000 (₹500 x 100 shares). When you invest in a share, the share price can go up or down. It is quite possible that the share you purchase and take a long position in falls on the day you trade instead of rising.

Therefore, it is important that you decide how much loss you are ready to bear if the trade goes against your position. This acts as a safety net and helps minimise your losses. Hence, the third intraday tip is to research intraday calls, which are buy and sell recommendations, and set a stop-loss level.

Continuing with the same example, if you had set a stop-loss at ₹540, the losses would have been limited to ₹1,000 only (₹10 x 100 shares).

  • Book profit when the target is reached

Greed is every intraday trader’s enemy. Why, you may ask? It is because it only takes a few minutes for the market to switch sides, especially if the market is too volatile.

The secret to successful intraday trading lies in the high leverage and margins that traders enjoy. Leverage and margins help amplify profits (as well as losses). But the trick lies in not getting greedy once that target is reached. Don’t wait for the stock price to increase further if it has reached your target price.

Avoid falling into the trap where you feel that the price will keep rising (or falling if you short sell). You must make trade decisions based on facts and strategies and not on how you feel a stock will perform. If there is good reason to believe that the price is likely to move in the right direction, then adjust the stop-loss accordingly.

  • Always close all your open positions

Many intraday traders choose to take delivery of the shares if the stock price target they set at the start of the day isn’t met.

This may not be a good strategy. After all, the stocks were bought for intraday trading based on market trends and technical analysis of the stock movements. They may not be good enough for a long-term investment.

Imagine what would happen if a leading company declared bankruptcy post-market closing and the stock opened with a gap down the following day. Investors holding the stock at the end of the day might not get a chance to exit their position and would thus have to take a hit on their portfolio.

Whereas, for an intraday trader, company specific information released during the day can be processed during the same day. They will have a chance to deal with the information impact in real-time.

Post the market hours, the news would not affect intraday traders as they might have already squared off their position. It helps eliminate overnight risk without blocking any capital.

  • Do not challenge the market

It is nearly impossible to predict market movements. Often, you may find that all the factors are indicating a bullish market. As usual, you may expect your target stock to rise. But the market decides to disagree and the stock price does not rise.

The bottom line is to not get too attached to your analysis. If the market is not supporting your analysis, sell and exit your position as soon as it hits your stop-loss level. Holding on to the hopes that the market will act as you predicted it to can increase your losses.

  • Research your target companies thoroughly

Once you have identified a set of stocks to trade by going through professional intraday calls, make sure to research them thoroughly. In other words, do your homework! Start with understanding how technical analysis can help you make better trading decisions.

Find out when any corporate events are scheduled for. These include acquisitions, mergers, bonus issues, stock splits, and dividend payments, among others. These events could turn out to be as important as being up to date with the technical levels.

  • Timing is crucial

Profits in intraday trading depend heavily on the time factor. One of the best intraday trading tips is not to take a position within the first hour of trading for the day. This is because volatility tends to be high at this hour. This leads to heavy rush and noise in the first market hour, which ultimately leads to huge price fluctuations. Many experts prefer taking an intraday position between noon and 1 PM.

  • Choose the right platform

Intraday traders make frequent multiple transactions and accrue gains daily. As such, you need to choose the right platform that allows for quick decision-making and execution and charges minimal brokerage.

With Kotak Securities, you only have to pay a minimal brokerage of ₹10 per order with Trade Free Youth, Trade Free, and Trade Free Pro plans.

Lastly, it is essential to remember that discipline is paramount in intraday trading. Track your strike rate and accept that not all trades will go as expected. Losing is part and parcel of this journey. Your primary focus should be on minimising losses while striving to win big.

Intraday traders often decide to pick stocks depending on the volume of trading. Generally, it is better to pick stocks when the trading volume is high. That’s because if the trading volume is high, prices also move upwards. Volume is nothing but the number of times a company’s stock is traded at a particular time.

Another aspect that traders lean on is technical analysis, which is often used to identify short term trends and indicators. It helps traders understand the current market mood based on which they can strategically decide when to enter or exit a position with maximum gains.

A stock’s resistance level is a handy indicator, too. Buying a stock when it breaks its resistance level and moves upwards is usually a good time to pick stocks as it indicates growing strength and potential for more upside.

Being up-to-date with daily news and market events is also quite critical for intraday traders. In most cases, a company’s stock prices rise on the back of good news. It is also handy to keep a tab on the top gainers and losers of the week. They can tell you how different stocks have been performing over a particular period.

Daily charts like hourly, 15-minute, and five-minute charts are commonly used by intraday traders to assess stock movements. These charts help in identifying short-term trends, assisting in more accurate decision-making. You need to understand how to read and interpret these charts effectively.

Hourly charts can show general trends throughout the day, while 15-minute charts help identify entry and exit points. The five-minute chart offers a closer look at rapid movements, making it useful for quick trades.

Using multiple time frames together can provide a clearer picture of the market’s direction. Intraday trading tips include analysing these charts to spot key support and resistance levels.

Though this might not sound like an intraday tip, learning the basics of technical analysis is a must if you want to understand the game of trading intraday.

Don’t jump into the water just because it sounds fun and thrilling. You must have some basic understanding of the various technical indicators. These indicators will make you a smarter trader and ultimately bring more profits.

For example, the Relative Strength Index (RSI) is another technical tool that can help evaluate which way the stock prices can move. If the RSI of a stock is above 30, it sets off a potential ‘buy’ signal as it suggests that the stock is undersold. If it is above 70, it indicates that a stock has been overbought and sets off a potential ‘sell’ signal.

The risk-reward ratio, also known as the RR ratio, compares a trade’s potential profit to its potential loss. It uses the difference between a trade’s entry point and stop-loss order to gauge risk and the difference between profit target and entry point to find reward.

RR Ratio = (Entry point - stop loss point) / (Profit target - entry point)

When it comes to intraday trading, you cannot simply rely on instinct or a hunch. You need a solid plan, which is where trading strategies come in.

These strategies act like your personal playbook. They help you decide when to enter a trade, when to exit, and how to manage your risk in between. Here are a few common ones you should know about:

  • Momentum trading:

This strategy focuses on stocks that are moving fast. Traders look for stocks showing strong upward or downward momentum and jump in to ride the wave. Suppose a company reports great earnings and its stock starts soaring. A momentum trader may enter quickly and ride the surge, but they’ll also exit fast before the momentum fizzles out.

  • Breakout trading:

This one’s about timing. Traders watch for a stock to move beyond a key level, say resistance or support, with high volume. If the stock "breaks out" above resistance, it might be a signal to buy. If it breaks below support, it could be time to short.

  • Reversal:

Not every rise continues, and not every fall lasts forever. This strategy assumes that prices will eventually return to their average or mean. If a stock drops sharply without news, traders might bet on a bounce. However, do note that reversals can be tricky to spot in real time.

  • Scalping:

Scalping is for the ultra-active trader. The goal? Small profits made frequently. Scalpers enter and exit trades within minutes, sometimes seconds, aiming to capitalise on tiny price movements throughout the day. This strategy requires serious discipline.

Intraday trading can be risky, especially for beginners. You need to be aware of common mistakes that can cost you significantly. Here are key pitfalls to avoid:

  • Failing to set stop-loss orders: Never enter a trade without setting a stop-loss. This is one of the most important intraday trading tips. Without it, you risk large losses if the market moves against you.

  • Trading without a clear plan: You should have a detailed strategy before starting. This includes your entry and exit points, as well as your risk management rules.

  • Getting swayed by emotions: Emotions can cloud your judgment and lead to impulsive decisions. Stick to your strategy, and do not let fear or greed take over. Your mind must be calm and focused.

  • Holding losing trades: Avoid holding onto losing trades, hoping they will rebound. If a trade hits your stop-loss, exit and limit your loss. Holding on can turn small losses into big ones.

  • Overtrading: Avoid taking too many trades in a day. Overtrading can lead to mistakes and increased transaction costs. Focus on quality trades rather than quantity.

  • Ignoring technical analysis: Use technical indicators and chart patterns to guide your decisions. Ignoring these can make your trades more speculative than calculated.

  • Not keeping up with market news: Stay informed about market news and economic reports. Surprises can cause sudden price movements, impacting your trades.

Follow these tips, stay disciplined, and remember that consistency is key to long-term success in intraday trading.

Intraday trading involves buying and selling stocks within the same day for quick gains. To succeed, you need to stay alert, know technical analysis, and use strategic entry and exit points. Start by trading liquid stocks and diversifying your positions to manage risk effectively.

Always set stop-loss levels to limit potential losses and book profits once targets are reached. Avoid holding positions overnight to prevent exposure to unexpected news. Timing matters, so trade when market volatility is low and stay updated with company news and economic events.

Master technical analysis tools and maintain discipline. Remember to always avoid emotional trading and overtrading. Stick to your plan and keep learning. Ready to refine your trading skills? Take action and stay consistent!

Frequently asked questions about intraday trading

Some intraday trading tips to make money are:

  • Formulate a rule book: It is one of the foremost intraday trading tips for beginners. Create a rulebook that sets guidelines for how much capital you are willing to invest, the losses you can bear, the risk-reward ratio, etc. Narrow down the industries you want to target for a profitable trading experience.

  • Restrict trading to limited stocks: Among several intraday trading strategies include restricting your trading to limited stocks. Don’t open too many positions.

  • Put a stop-loss order: One of the prudent intraday trading techniques involves setting up a stop-loss order for every trade. It helps you plug your losses at a certain level.

  • Define your profit goals: It’s easy to get carried away by emotions in intraday trading. You must keep emotions under control and define your profit goals. If the stock has reached that level, book profits and exit.

  • Choose the right trading platform: One of many prudent intraday trading tricks involves choosing the right trading platform with all the tools you need to make the right decisions.

There isn’t any particular time which can be described as the best for intraday trading. However, many experienced traders usually choose between first 30 minutes of the market hours, or those looking at higher price movements go for the last 45 minutes and the rest do it in the remaining hours from 10 AM to 2:45 PM.

Intraday stock tips include choosing liquid stocks, freezing entry and exit prices, setting a stop-loss level, booking profits once targets are reached, and thoroughly researching your target companies.

Traders should try out different strategies, see what works best for them and then decide to use that strategy for their trades.

Intraday trading timing is from 9:15 AM to 3:30 PM on days when markets remain open.

Factors affecting intraday trading include stock liquidity, news flow, and the overseas market.

If the intraday target is not achieved, several investors book shares for delivery. However, this is not one of the good intraday trading tricks. Make sure you close all your open position before the end of the trading session.

This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their own research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.

Investments in securities market are subject to market risks, read all the related documents carefully before investing. Please read the SEBI prescribed Combined Risk Disclosure Document prior to investing. Brokerage will not exceed SEBI prescribed limit.

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