Intraday Trading: Strategies, Risks, and Reality Check for Indian Traders

Everything you need to know about day trading in Indian markets - from strategies and tools to the hard truths about success rates.

Intraday trading attracts thousands of Indians daily with promises of quick profits. But SEBI data reveals that 89% of intraday traders lose money. Before you start, here's the complete picture.

What is Intraday Trading?

Intraday (or day trading) involves buying and selling stocks within the same trading session. Positions are squared off before market close (3:30 PM IST).

Key Differences: Intraday vs Delivery

Who Should Consider Intraday?

Prerequisites:

• ₹5-10 lakh capital you can afford to lose
• 4-6 hours daily to monitor markets
• Strong emotional control
• Deep understanding of technical analysis
• At least 6 months of paper trading

Who should avoid:

• Salaried individuals (no time for active monitoring)
• Those with limited capital
• Risk-averse investors
• Beginners without market knowledge

Popular Intraday Strategies

1. Moving Average Crossover

• Entry: 9 EMA crosses above 21 EMA
• Exit: 9 EMA crosses below 21 EMA
• Timeframe: 5-minute or 15-minute charts

2. VWAP Trading

• Buy when price crosses above VWAP
• Sell when price falls below VWAP
• Works best in trending markets

3. Opening Range Breakout (ORB)

• Define range for first 15-30 minutes
• Trade breakout in either direction
• Set stop-loss at opposite end of range

4. Support and Resistance

• Identify key levels from daily charts
• Buy at support, sell at resistance
• Use with confirmation indicators

Essential Tools and Indicators

Must-have indicators:

• Relative Strength Index (RSI)
• Moving Averages (9, 21, 50 EMA)
• Volume
• VWAP
• Bollinger Bands

Recommended platforms:

• Zerodha Kite (free charting)
• TradingView (advanced analysis)
• Upstox Pro
• Angel One

Risk Management Rules

The 1% Rule: Never risk more than 1% of capital on a single trade.

• Capital: ₹5,00,000
• Max risk per trade: ₹5,000

Position Sizing:

Position Size = Risk Amount / (Entry - Stop Loss)

Example:

• Entry: ₹500
• Stop Loss: ₹495
• Risk per trade: ₹5,000
• Position: 5000/5 = 1000 shares

Daily Loss Limit: Stop trading if you lose 3% of capital in a day.

The Hard Truths

SEBI Study Findings (2023):

• 89% of intraday traders incur losses
• Average loss: ₹1.1 lakh per year
• Only 1% make consistent profits
• Transaction costs eat 30-40% of gross profits

Why Most Traders Fail:

1. Overtrading: Taking too many positions
2. Overleveraging: Using maximum margin
3. No stop-loss: Hoping losing trades will recover
4. Revenge trading: Trying to recover losses immediately
5. Overconfidence: Initial luck breeds false confidence

Tax Implications

Intraday profits are taxed as speculative business income:

• Taxed at your income slab rate
• Can offset against speculative losses only
• Losses can be carried forward for 4 years
• Audit required if turnover > ₹10 crore

A Realistic Path to Trading

Phase 1 (Month 1-3):

• Learn technical analysis
• Paper trade on virtual platforms
• Maintain a trading journal

Phase 2 (Month 4-6):

• Trade with minimal capital (₹20-50K)
• Trade only 1-2 setups you've mastered
• Focus on process, not profits

Phase 3 (Month 7-12):

• Gradually increase position sizes
• Track and analyze all trades
• Refine strategy based on data

Phase 4 (Year 2+):

• Scale up if consistently profitable
• Develop multiple strategies
• Consider it a profession, not a hobby

Alternatives to Consider

If intraday seems too risky:

• Swing trading: Hold for days/weeks
• Positional trading: Hold for weeks/months
• Options selling: Defined risk strategies
• Systematic investing: SIPs in mutual funds

Final Advice

Trading is not a get-rich-quick scheme. It's a skill that takes years to develop. Most successful traders treat their first 2-3 years as tuition — a period of learning and controlled losses.

If you decide to trade, start small, protect your capital, and never trade with money you can't afford to lose.