Intraday (Day Trading)

Intraday trading, also known as day trading, involves buying and selling financial instruments within the same trading day to take advantage of short-term price movements. Unlike scalping, which involves very quick trades, intraday traders hold positions for minutes to a few hours but always exit before the market closes.

Instruments like Nifty and Bank Nifty futures & options are popular for intraday trading due to their high liquidity, volatility, and leverage availability. Traders use technical analysis to identify trade setups and capitalize on momentum, breakouts, and trend reversals.

Key Characteristics

• The objective is to profit from short-term price fluctuations while avoiding overnight risk.
• Uses stop-losses and trailing stop-losses to protect capital.
• Works best with technical indicators like Support & Resistance, RSI, MACD, VWAP, Bollinger Bands, and Candlestick Patterns.

Time Frames Used

• Entry & Execution: 5-minute (M5), 15-minute (M15), 30-minute (M30) charts
• Confirmation & Trend Analysis: 1-hour (H1), Daily (D1) charts

Example

A trader spots a breakout in Nifty at 22,200, enters a long trade at 22,205, and exits at 22,240, making a 35-point profit. With 10 lots (500 quantity) in Nifty futures, this results in a ₹17,500 profit (before brokerage and charges).