Intraday Trading for Beginners: Step-by-Step Guide 

Intraday trading is an exciting way to capitalise on short-term market opportunities. For beginners, starting this journey can seem challenging, but with the right steps, it becomes manageable and rewarding.

This blog provides a comprehensive step-by-step guide for beginners to learn how to do intraday trading effectively. From setting up a trading account to building strategies and managing risks, this guide simplifies the process for new traders looking to enter the market.

Step 1: Set Up Your Trading Account

To start intraday trading, the first step is to open a trading account with a broker that supports intraday transactions. Choosing the right broker and platform is crucial for seamless trading.

How to Set Up Your Trading Account

1. Select a Reliable Broker
   • Look for brokers offering intraday-specific features like margin trading, low brokerage fees, and real-time data.
   • Ensure the broker provides advanced tools like technical charts and live market feeds.
2. Complete the KYC Process
   • Submit essential documents like PAN, Aadhaar, and bank account details to activate your trading account.
3. Opt for a Demo Account(Optional)
   • Some brokers offer demo accounts for practising trades without real money. This is an excellent way for beginners to get hands-on experience.

Features to Look for in a Broker

• Real-Time Data: Ensure the platform provides up-to-the-minute stock prices and volume data.
• Technical Tools: Platforms with advanced charting features help in market analysis.
• User-Friendly Interface: A simple interface ensures smooth execution of trades.

Pro Tip for Beginners – Start small. Begin trading with minimal capital to understand the platform and test your strategies before scaling up.

Step 2: Understand the Basics of Intraday Trading

Before placing your first trade, it’s essential to understand the fundamental concepts of intraday trading. These basics lay the foundation for effective decision-making.

Key Terms Every Beginner Should Know

1. Margin and Leverage
   • Margin: The amount of money borrowed from your broker to take larger trading positions.
   • Leverage: The ratio of your margin to the trading position.
   • Example: With 10x leverage, ₹10,000 can control a trade worth ₹1,00,000.
2. Stop-Loss Order
   • A stop-loss order automatically exits a trade if the stock price moves against you, limiting your losses.
3. Lot Size
   • Refers to the standard quantity of shares in a single trade. Intraday trading often involves multiple lots.
4. Volatility
   • The rate at which a stock’s price fluctuates during the trading day. High volatility creates more opportunities for intraday traders.

How Intraday Trading Differs from Delivery Trading

Pro Tip for Beginners – Familiarise yourself with market hours and key indices like NIFTY and SENSEX to understand broader market trends.

Step 3: Learn Technical Analysis

Technical analysis is a crucial skill for intraday traders, helping you predict price movements based on historical data. Beginners should start with simple indicators and progress to advanced tools as they gain experience.

Key Technical Indicators for Beginners

1. Moving Averages (MA)
   • Averages stock prices over a specific period, smoothing out price fluctuations.
   • Example: A 50-day MA helps identify short-term trends by showing the average closing price over the last 50 days.
2. Relative Strength Index (RSI)
   • Measures momentum and overbought/oversold conditions.
   • Tip: RSI above 70 indicates overbought conditions, while below 30 suggests oversold conditions.
3. Support and Resistance Levels
   • Support: The price level at which demand is strong enough to stop the price from falling.
   • Resistance: The price level at which selling pressure prevents further price rises.
   • Use Case: Set entry points near support and exit points near resistance.
4. Volume Analysis
   • Tracks the number of shares traded to confirm the strength of a trend.
   • Tip: High volume during a price rise signals strong buyer interest.

How to Apply Technical Analysis in Intraday Trading

1. Identify Trends: Use indicators like moving averages to spot upward or downward trends.
2. Set Entry and Exit Points: Define price levels based on support, resistance, and momentum indicators.
3. Monitor Real-Time Data: Use charting tools to track live price movements and confirm signals.

Pro Tip for Beginners – Stick to 1–2 indicators at a time to avoid confusion and focus on mastering their application before exploring more tools.

Step 4: Choose the Right Stocks for Intraday Trading

Selecting the right stocks is one of the most critical aspects of successful intraday trading. The right stock offers liquidity, volatility, and opportunities to capitalise on price movements.

Factors to Consider When Selecting Stocks

1. Liquidity
   • Highly liquid stocks ensure smooth buying and selling without significant price impact.
   • Tip: Focus on stocks with high trading volumes.
2. Volatility
   • Stocks with moderate daily price fluctuations create opportunities for intraday profits.
   • Tip: Avoid excessively volatile stocks, as they can lead to unpredictable losses.
3. News and Events
   • Stocks reacting to news, such as earnings reports or policy announcements, often exhibit increased intraday activity.
   • Example: A company announcing strong quarterly results might experience a price surge during the day.
4. Sector Performance
   • Track the performance of sectors like banking, technology, or energy, as these often exhibit high intraday movement.
5. Correlation with Index Movements
   • Stocks that closely follow indices like NIFTY or SENSEX provide predictable patterns for intraday trades.

How to Build a Watchlist for Intraday Trading

1. Identify 5–10 stocks meeting the above criteria.
2. Regularly update your watchlist based on market conditions and trends.
3. Use tools like market scanners to track live price movements.

Pro Tip for Beginners – Start with 2–3 high-liquidity stocks and expand your list as you gain confidence and experience.

Step 5: Build Your Intraday Trading Strategy

An effective intraday trading strategy is a roadmap that guides your decisions and helps you stay disciplined. It ensures that your trades align with your goals and risk tolerance.

Key Components of an Intraday Trading Strategy

1. Set Clear Entry and Exit Points
   • Define the price levels for entering and exiting trades based on technical analysis.
   • Example: Enter a trade near support levels and exit near resistance levels.
2. Define Risk-Reward Ratios
   • Aim for a risk-reward ratio of at least 1:2 to ensure that potential profits outweigh possible losses.
   • Example: If your stop-loss is ₹5 below the entry price, set your target price at least ₹10 above.
3. Leverage Technical Indicators
   • Use tools like moving averages, RSI, or Bollinger Bands to validate your trade setup.
   • Combine indicators for stronger signals but avoid overcomplicating your analysis.
4. Set Stop-Loss and Target Prices
   • A stop-loss limits your losses, while a target price ensures you lock in profits.
   • Tip: Always define these levels before entering a trade and stick to them.
5. Focus on a Few Trades Per Day
   • Overtrading can dilute your focus and increase transaction costs. Stick to 1–3 well-researched trades.

Example Intraday Trading Strategy

• Scenario: Stock A is trading at ₹500, and the support level is ₹495, while resistance is at ₹520.
  • Entry Point: Buy near ₹500.
  • Stop-Loss: Set at ₹495 (₹5 below entry).
  • Target Price: Set at ₹520 (₹20 above entry).
  • Risk-Reward Ratio: 1:4 (₹5 risk for ₹20 reward).

Pro Tip for Beginners – Test your strategy in a demo account or with small capital before applying it to larger trades.

Step 6: Execute and Monitor Your Trades

Executing and monitoring trades effectively is crucial for intraday trading success. This step ensures that your planned strategies are implemented correctly and adjusted as needed based on market movements.

Executing a Trade

1. Place Orders with Precision
   • Use limit orders to buy or sell at a specific price to avoid slippage.
   • For quick execution, use market orders, but monitor the price closely.
2. Verify Order Details
   • Double-check the stock name, quantity, and price before confirming the trade.
   • Pro Tip: Avoid rushing; minor errors in order placement can lead to significant losses.

Monitoring Your Trades

1. Track Price Movements in Real-Time
   • Use live charts and technical indicators to follow stock movements closely.
2. Adjust Based on Market Conditions
   • If the stock is nearing your target price, consider using a trailing stop-loss to secure profits while staying in the trade.
   • Example: Move the stop-loss to ₹505 if the stock rises to ₹515 after an entry at ₹500.
3. Avoid Impulsive Adjustments
   • Stick to your pre-defined plan unless market conditions strongly justify a change.

Tools for Execution and Monitoring

• Charting Platforms: Use tools like TradingView or your broker’s charting software.
• Alerts and Notifications: Set price alerts for target and stop-loss levels to avoid constant monitoring.

Pro Tip for Beginners – Don’t overreact to minor fluctuations. Focus on overall trends and trust your strategy to guide your decisions.

Step 7: Review and Improve Your Trading Performance

Reviewing your trades is an essential step for continuous improvement. Analysing past performance helps identify strengths, weaknesses, and areas for refinement in your intraday trading strategy.

Why Reviewing Trades Matters

1. Learn from Mistakes:
   • Understand what went wrong in losing trades to avoid repeating errors.
2. Refine Strategies:
   • Identify patterns in successful trades to replicate them in future.
3. Track Progress:
   • Measure improvement over time by analysing performance metrics like win rates and risk-reward ratios.

How to Review Your Trades

1. Maintain a Trading Journal
   • Record details of each trade, including:
     • Entry and exit prices.
     • Stop-loss and target levels.
     • Market conditions and rationale behind the trade.
     • Outcome (profit/loss).
2. Analyse Performance Metrics
   • Win Rate: Percentage of successful trades.
   • Risk-Reward Ratio: Average profit compared to average loss.
   • Execution Accuracy: How closely you followed your plan.
3. Identify Trends in Your Trades
   • Are certain sectors performing better?
   • Do specific strategies yield higher success rates?
4. Seek Feedback and Insights
   • Consult resources like forums, mentors, or platforms like Streetgains for expert guidance.

Example: Reviewing a Trade

• Scenario: Bought Stock A at ₹500 with a target of ₹520 and a stop-loss at ₹495.
  • Outcome: Exited at ₹515 due to early adjustments.
  • Lesson: Avoid premature exits when the trade is progressing as planned.

Pro Tip for Beginners – Set aside time at the end of each trading day to review your trades. Consistent analysis is the key to long-term success.

Building Confidence in Intraday Trading

Intraday trading is a skill that requires patience, practice, and continuous learning. By following this step-by-step guide, beginners can lay a strong foundation for success. Understanding the basics, using effective strategies, and reviewing performance consistently will help you trade with confidence and discipline.At Streetgains, we provide actionable insights and tools to guide your trading journey. Start small, stay consistent, and let your skills evolve over time to achieve your trading goals.