You can start stock intraday trading in India in 2021 if you know the psychology (& science) behind rising and falling markets. Intraday trading relies heavily on price movements.
Capturing favorable price movements in a disciplined manner (without being greedy) is critical for making money in day trading. Once you learn this art, you would easily start picking the best stocks for intraday trading in India.
For example, you can buy ACC Cement stock at Rs. 955 and sell it at 960 to capture Rs. 5 profit.
All you need is to be disciplined enough to close the trade at Rs. 960 and not wait (get greedy) for the price to climb to Rs. 965.
Which unfortunately many people do and lose money because the price moves sharply. Instead of rising to Rs. 965 the prices can move back to Rs. 950 in a few minutes.
As a beginner, you need to avoid such mistakes while doing intraday trading in India.
Likewise, you can make money even when the stock price is falling. In day trading you can sell the stock first and buy later (it’s called shorting a stock).
For example, if you predict that shares of Infosys will go down, then you can sell first at Rs. 597 and buy within the same day at Rs. 588, again making a profit of Rs. 9 per share.
This is what exactly people were doing (shorting) when the stock market crashed due to fear of COVID-19 in March 2020. People made tons of money by selling shares in the beginning and then buying later during the day when the prices have come down substantially.
For example, people were making money using the above technique when the shares of Maruti Suzuki were falling on 23rd March 2020.
The stock started falling from Rs. 4600 to Rs. 4200 during the day giving ample chance to do sell-buy trades.
In case if you are not sure of the individual stock price movements then you can sell NIFTY.
During March 2020, NIFTY fell 3000 points, starting from 11,000 at the beginning of March to 8,000 points at the end of March 2020.
In day trading the buy/sell or sell/buy sequence does not matter because in the end, you won’t get any shares delivered to your account.
Experienced traders know this, but if you are new to intraday trading then the article has essential resources to help you get started.
Disclaimer – All the stock and their prices mentioned in the article are only for example purpose. We are not recommended any stock to buy or sell.
Let’s check the steps on How to do Intraday Stock Trading in India
You Need A Trading Account To Do Intraday Trading in India
Demat and Trading accounts help you to access the stock market for stock investing and trading.
Intraday trading requires a Trading Account and a linked bank account only. But stockbrokers will provide you the option of a Demat account as well so that you can invest long term in stocks.
Further, demat accounts will be helpful in holding stocks in case you are not able to square off a buy position for any reason.
The following are the best stock brokers individually reviewed by us. They are good online trading platforms that you can pick depending on your trading style and investment needs.
|Rs. 20 per executed order||Rs. 20 per executed order||Rs. 10 per order (Titanium plan)|
|15X intraday margins||12.5X intraday margins||5X intraday margins|
|Rs. 200 A/c opening||Rs. 200 A/c opening||Rs. 999 plan charges|
|AMC – Rs. 150||AMC – Rs. 300||AMC – Free|
|Open Upstox Account||Open Zerodha Account||Open 5Paisa Account|
Special offer on Upstox Account (Limited Time)
- Free Demat and trading account opening
- Zero brokerage for next 30 days
Demat & Trading Account Opening Process
You can Demat and Trading accounts in India online and offline.
I have discussed only the online method below because the online process is quick, hassle-free and involves minimum paperwork.
Step 1: Keep the Following Documents Ready
- Aadhaar Card
- PAN Card
- Canceled Cheque
- Cheque showing IFSC or MICR Code.
I am going to sharing the Zerodha account opening process in details here. You can also start the account opening process with Zerodha through this link.
Step 2: Fill Account Opening Form
Click the link to visit Zerodha account opening page.
Look for the “demat account opening” tab on the website of your stockbroker. For example, the above is the account opening tab for Zerodha.
Click on the “Sign up” button to start the application process.
Once you are in, you need to provide your mobile number and email address and verify them with the OTP received.
Next, you need to provide your PAN number and date of birth details for KYC as shown below.
Step 3: Pay Demat & Trading Account Opening Fees
Intraday trading can be done in Equity, Equity derivatives, Currency F&O and Commodity F&O.
At Zerodha, you have the option to select the segments in which you want to trade.
Step 4: E-Sign the Application Using Aadhaar
Next, you need to digitally sign the online application form with Aadhaar eSign to create your trading account.
The process is electronically secured with SSL encryption and Zerodha does not store your Aadhaar number.
If you do not want to use Aadhaar then you can use the offline account opening process. But there can be charges for offline demat and trading account opening. Like, Zerodha charges an additional fee of Rs. 300 for sending you the application form.
Step 5: Upload KYC Documents
You need to upload your KYC documents to complete the demat and trading account opening process.
Your stockbroker will send the trading account login ID and password over email. Once you receive them, make sure that you change your password.
Some stockbrokers may ask you to print the application form and courier with a copy of KYC documents for their records.
Before you jump into day trading, make yourself familiar with certain intraday trading terminology.
Trading Segments for Doing Intraday Trading in India
In India, you can do intraday trading in Equity, Equity Derivatives (also called Equity F&O), Currency F&O and Commodity F&O.
#1. Equity Intraday Trading in India
Intraday trading in equity involves buying and selling stocks without the intention to hold the shares for more than a day. You need to square off the trade before the close of the day’s trading session (before 3:30 pm).
Generally, your broker will ask you to square off all your open intraday trades by 3:20 pm to avoid any trade getting left out.
You can do intraday trading on shares of known companies listed on BSE and NSE.
You should pick stocks that are highly liquid, which means there are continuous trades happening for that particular share. This is because you will always have a buyer and seller available for trading when you go to day trade.
Intraday trades are not allowed on stock banned by the exchanges because of price manipulation. They are categorized as “T” group shares. You should avoid doing intraday trading on banned shares at any cost because they have sudden abnormal price movements.
#2. Equity Derivatives Trading in India
Equity derivatives are available for intraday trading consist of futures and options (known as F&O) on underlying stocks.
Futures and Options instruments are available on highly liquid stocks. They are selected by stock exchange from the list of top 500 stocks with high market capitalization and traded value.
They are complex instruments, which I will cover in detail in another article.
#3. Currency Derivatives Trading
In India, you can trade in currency derivatives on NSE, BSE and MSE (Metropolitan Stock Exchange). The currency market opens at 9 am and closes at 5 pm.
You can trade in currency futures and options and all the trades are cash-settled in Indian rupees.
In India, you can trade-in only four currency pairs.
- Rupee-Dollar (INR-USD)
- Rupee-Pound (INR-GBP)
- Rupee-Euro (INR-EUR)
- Rupee-Yen (INR-JPY)
The rest of the currency pairs are not allowed for trading on stock exchanges by RBI.
#4. Commodity Trading in India
You can do intraday commodity trading in F&O on commodity products like metals, energy products like oil & gases and agro-based commodities.
The exchanges where you can trade commodity F&O are MCX, NCDEX, ICEX, NMCE and ACE. Out of which MCX is the biggest platform.
Agro-based commodities can be traded between 9 am to 5 pm where the trading time for non-agricultural commodities is between 9 am to 11:30 pm.
Terms Used While Doing Intraday Trading in India
Basic terms associated with intraday stock trading that you should know are under.
Margins are also called leverage in day trading. They help you trade larger volumes by keeping a small amount of money.
For example, If you want to buy 1000 shares intraday worth Rs. 100. You will need (1000 shares x Rs. 100 per share) = Rs. 1,00,000 in your account.
Let’s say you have only Rs. 20,000 in your account but your stockbroker is ready to provide the rest of the 80,000 rupees to complete the trade worth Rs. 1 Lakh.
This means your stockbroker has provided 5X margins. You have a leverage of 5 times on your money.
#2. Limit Order
Limit order helps you buy or sell stocks at a specific price that you are willing to trade. The trading platform will send your limit order to the stock exchange marking your specified price.
For example, the current market price of TCS shares is Rs. 1680. You already have some TCS shares and you want to sell them at Rs. 1690.
In such a case, you can enter a limit order specifying your stockbroker to sell TCS shares at Rs. 1690.
#3. Market Order
Market orders are the current trading price of a stock. When you place a market order for a liquid stock then the buying/selling will happen immediately at the best price available.
For example, below are the pending buy and sell quotes for ITC shares.
All the BID quotes for ITC shares along with quantity (on the left) are placed by the buyers. If you want to sell ITC shares then the market order (best available price) will be Rs. 178.65 and the quantity available is 3891 shares.
All the ASK prices (on the right) are placed by sellers who are ready to sell ITC shares at their given prices. You can buy 260 ITC shares immediately at Rs. 178.75 by placing a market order.
#4. Stop Loss Order
Stop-loss order protects you from the risk of continuing a loss trade. Let us understand from the example below.
Suppose, you have bought Reliance shares at Rs. 1100 for intraday trading. Naturally, you will want to sell them higher, let say at Rs. 1108 and book profit.
But due to adverse market movements, the share price starts to decline and is trading at Rs. 1098. Which means, at the moment you have an unrealized loss of Rs. 2 per share. The price can move down further to Rs. 1090 creating more losses.
The above loss situation can be prevented by placing a stop-loss order at Rs. 1097. When you do that, the Stop loss order gets executed at Rs. 1097 booking a loss of Rs. 3 per share. But the stop-loss order protected you from making further losses.
#5. MIS (Margin Intraday Square off) Order
MIS orders are intraday orders that need to be closed (squared off) before the end of the day’s trading.
Most stockbrokers square off your open MIS trades at around 3:15 pm unless you convert the outstanding MIS order into delivery orders.
#6. Bracket Orders (BO)
Bracket order removes risk elements in intraday trading. The Bracket order is designed to lock your profit and losses by creating a price bracket on both sides.
The system places a target profit order and a stop-loss order as brackets simultaneously with the original buy/sell order. For example, you want to place a buy BO order for Cipla that is currently trading at Rs. 460.
The system will place three order simultaneously as below
- Buy order at Rs. 460
- Target profit order at Rs. 467
- Stop Loss order at Rs. 456
Of course, you will have the option to set the target and stop-loss price but all the three orders will be launched simultaneously under the Bracket Order.
#7. Cover Orders (CO)
Cover order is a risk-mitigating order in which a stop loss is placed simultaneously with the original buy/sell order.
For example, if you want to place an intraday buy CO order for HDFC Bank shares that are currently trading at Rs. 860.
The trading platform will enter both the buy order (at Rs. 860) and a stop-loss order (at Rs. 857) simultaneously to cover your original buy order. You have the flexibility to set the stop-loss orders within the range allowed by your stockbroker.
Know Your Trading Platform for Doing Intraday Trading
You will receive your user ID and password immediately, once you are done with the demat and trading account opening process.
Next, you need to visit the trading website (details can be found form the welcome kit or email) of your stockbroker.
Enter your ID and password to view the trading screen. Initially, the screen will be blank without showing any shares. Few of them may have live Sensex and Nifty prices.
I am going to share every detail like how to place your trade, how to buy or sell shares, setting watchlist. I used Upstox platform to show these details.
If you are a newbie, then I would suggest you to open FREE Upstox account from this special link. So that, you wouldn’t need to learn the information for starting intraday trading.
You would find various options on your trading platform that you need to explore.
Depending on your stock broker, the trading platform might have different features. But the above features will be available with all the trading platforms.
#1. Balance Check & Option for Money Transfer
You can not trade unless you have money in your trading account even though your stockbroker has linked your savings bank account. You need to transfer money from your bank account to your trading account.
The “Balance” tab also shows your net fund position and the margins used.
Click on the “Add funds” tab to transfer money into your trading account.
#2. Sensex and Nifty Tickers
The stock markets (BSE & NSE) tickers help you gauge the broad market movements while you trade individual stocks and other indexes.
The ticker prices reflect the overall market sentiments and are a good indicator to gauge the direction of the market. This is important because generally with falling markets most of the stock prices will also fall and vice versa.
#3. Creating Watchlist
Watchlist gives you a quick glance at the prices of your favorite stocks in one place. You can add all the shares to the watchlist that you intend to track.
Click the “+” button to open the search bar, then you can type the name of the stock and add it to the watch list. Below is the example to add Cipla stock.
When you add CIPLA to the watchlist you can instantly view the price charts.
#4. Order Book
The order book will contain details of all the orders that you have placed during the trading hours. The book will also tell you the status of your orders whether they have been executed or failed.
#5. Position Book
The position book reflects all your outstanding trade positions and the mark-to-market (MTM) position of the open trades.
MTM is the unrealized profit or loss status of your trade with respect to the current market price of the stock. For example, if you have purchased ITC shares at Rs. 180 and the current price is Rs. 182 then you have a positive MTM of Rs. 2 per share.
Whereas, if the stock price is Rs. 177 then you have a negative MTM of Rs. 3 per share.
#6. Holdings Book
The holdings will show only the delivery shares that you have purchased for the long term.
How to Place Your First Trade in Upstox For Intraday Trading
Buy/Sell trades can be placed by selecting the stock from the watch list, buy/sell buttons, market quotes, from the charts and news information and even from the previous traded orders.
The trade placing facility depends entirely on the trading platform and the features provided by your stockbroker.
Click on the “B” button and an order entry tab will popup where you need to fill in the order details like order type, quantity and then click on the buy button.
Likewise, you can click the “S” button to open the sell order entry tab.
The buy order complexity gives you the option to place simple (without any stop-loss), cover order (CO) and aftermarket orders (AMO).
You can select the order type to be a market order or as a limit order.
The market order gets executed immediately whereas you need to wait for the price to hit your specific level for the limit order to get executed.
The order position type is where you can define the order to be a delivery order or an intraday order.
All the intraday orders need to be squared off (closed) before the end of the trading session at 3:30 pm. Ideally, you should exit them before 3:20 pm so that you do not miss any intraday order.
Your broker might charge you for squaring off your pending intraday orders on your behalf.
How to Start Intraday Stock Trading in India
You are now ready for intraday trading. Below is the live example that will give you the confidence to place your trades.
You can select any of the liquid NSE or BSE shares for intraday trading. Intraday trading starts with placing either a buy order when you predict that the prices will rise. So that you can sell the stock later at a higher price and earn profit from the trade.
You can also start with a sell order when you predict that the price is going to fall so that you can buy the shares later at a lower price and close the trade profitably.
Below I have entered a sell order for 10 shares of ICICI Bank. I need to select a simple order with the order type as the market and need to indicate the position as intraday before I click the sell button at the bottom.
On doing so you will get a “Sell order confirmation” page as below. Check the order details once again before clicking the sell button. When you do that the order gets placed.
Likewise, you can enter an intraday buy order. I am showing just the example below. It has nothing to do with the previous order.
Let us continue with our previous intraday ICICI. After the order has been placed you can check the order status after some time in the order book.
The sell trade will take a few minutes to get executed at the best available market price and you will receive a pop-up confirmation on your trading screen with the price details. Our ICICI shares got sold at Rs. 334.70 per share. The price can be confirmed by right scrolling the order book.
The order book shows the status as complete which means you have successfully sold 10 shares of ICICI bank intraday.
You can wait till the share price comes down to your levels after which you need to close the trade and book profit.
The ICICI shares came down to 330 levels, which I feel is a good price to buy the shares back and close the intraday open position.
To square off the position you need to select the particular share and click the “square off” button.
This will automatically place the buy market order to complete the intraday trade.
New traders should remember that they have placed a buy market order which will take a few minutes to get executed. Wait till the time you receive a confirmation of your trade from the stockbroker.
Do not do the mistake of clicking the square off button once again. If you do that then the system will take it as a fresh buy order for that particular stock.
It happened to me. I clicked twice and inadvertently purchased 20 more shares of ICICI bank unknowingly.
Finally, I had to close all those buy positions with sell trades.
You can check the position book for details. If there are any outstanding orders then the book with show some share quantity and not zero.
Before you end your day do not forget to check the order book and the trade status.
Finally, in the evening you will receive the “Intraday Profit Sheet” from your broker indicating the trade details and the charges collected.
By the way, the initial 10 shares of ICICI bank were bought back (to close intraday trade) at Rs. 327.45. So I made a profit of Rs. 7.25 per share before the brokerage charges.
That was a small intraday trade for 10 shares, but in actual trading, a single intraday trade happens for Lakhs of rupees. So you can imagine the quantum of profit people are making on every single trade.
Intraday Trading Procedure in the Stock Exchange
Bombay Stock Exchange (BSE) and National Stock Exchange of India (NSE) is where most of the trading happens in India.
You can do stock trading only through SEBI registered stock brokers.
The market timings of the equities segment are
- Pre-open session from 09:00 hrs to 09:08 hrs
- Regular trading session from 09:15 hrs to 15:30 hrs
- The Closing Session is held between 15.40 hrs to 16.00 hrs
You can do intraday trading during a regular trading session only form 9:15 hrs to 15:30 hrs.
In order to prevent members from entering orders at non-genuine prices, the exchange has fixed daily price bands. Trading involves price bands on all stocks, any adverse movements above price bands results in a trading halt.
However, no price bands are applicable to shares on which derivative products are available.
The daily price bands are applicable on securities as below
- Daily price bands of 2% (either way)
- Daily price bands of 5% (either way)
- Daily price bands of 10% (either way)
Best Stock Trading App For Beginners in India
Here are my top 3 recommended trading apps. You can check here the review of 11 best trading apps in India 2021
#1. 5Paisa Mobile App
- Easy Demat Account opening through the app
- Trade-in Equity, Future & Options (F&O) and Currency segments
- Multi-asset Live watchlist synced across devices
- Advance Charting for better analysis
|Required Android||4.1 and up|
#2. Kite Mobile App by Zerodha
- One-tap universal instrument search for all contracts across NSE, BSE and MCX
- Multiple MarketWatch and live market depths
- Advanced chart with 100+ indicators and free historical chart data
- Trade Equities, F&O, Commodities, and Currency
- Various order types: Regular, AMO, BO (Bracket orders), CO (Cover orders)
|Required Android||4.0.3 and up|
#3. Upstox Pro Mobile App
- Access to NSE cash, F&O, and Currencies
- Apply 100+ technical indicators on real-time charts
- Trade directly from charts with the Trade From Charts (TFC) feature
- Create an unlimited number of customized watchlists
- Receive real-time market feeds
- Access predefined watch-list of Nifty 50 and other indices
|Required Android||4.1 and up|
|Size||Varies with device|
Websites for Learning Stock Trading and Investment
There are tons of websites online for stock market basics.
In early-stage, you can check the websites of
- Money control
- Equity Master
Virtual Site to Practice Stock Trading
Before starting you can practice stock trading on the following virtual sites;
Moneybhai, a stock trading game from moneycontrol, gives Rs.1 crore virtual money to practice intraday-trading. The platform can be used as an investment challenge or as a learning tool.
#2. Dalal Street
Dalal Street virtual platform offers Rs.10 Lacs of virtual money to experience the best way to trade and invest. The platform gives real-time trading simulation platform for stock trading.
ChartMantra is an online virtual game on stock market trading with the technical indicator to help gain more insights. The platform lets you learn technical analysis and play on historical markets.
Pros & Cons
Advantages of intraday trading are
- Higher margins up to 60X available to traders in comparison to investors
- High return potential on a lesser capital and shortest holding period
- Lower brokerage charges Flat Rs 10. when compared to delivery trades.
- Short-to-medium horizon for strategies to pay off.
Disadvantages of intraday trading
- Less return on capital when compared to long term investment
- Use of leverage can result in losses
- Requires constant screen attention
Share Trading Tips for Intraday Trading in Indian Share Market
- Always trade by placing a stop-loss trigger to reduce the potential loss.
- Invest no more than 10% or smaller sums for each trade to restrict the total capital loss.
- Trade only in two or three liquid stocks of the company which you are well versed with.
- Look for market trends and follow the same while day trading.
- Have a strategy beforehand and do not confuse in trading and investing mindset.
- Keep emotions at bay. Do not take revenge trading by placing higher bets to recover the loss.
- Book profit when the target price is reached and try not to challenge the market.
- Remember to close all open positions before the close of market hours.
- Do not trade on rumors or when you are not confident.
Disclaimer – The article intends to help and educate a person start stock trading. Stock trading, equity trading in general, is a risky asset where wrong trades can wipe out entire capital. Trade in the stocks after your own due diligence.
If you want to learn long-term investing, then you can read – How to invest in stock market