Why this matters
Intraday trading is the most popular — and most dangerous — form of trading in India. Over 90% of intraday traders lose money, according to a 2023 SEBI study. Yet it remains the fastest path to profits if done correctly. This guide covers everything you need: the best times to trade, which indicators actually work for intraday, margin rules, tax implications, and the strategies that professionals use every day on NSE. Read this before you take your next intraday trade.
Section 1: What Is Intraday Trading?
Intraday trading means buying and selling a stock (or derivative) within the same trading day. You open a position in the morning and close it before 3:30 PM. No overnight holding. Your broker's app calls this "MIS" (Margin Intraday Settlement) or "Intraday" order type.
The fundamental appeal of intraday is leverage. With MIS, your broker gives you 5x to 20x margin on certain stocks. This means with ₹1 lakh capital, you can take positions worth ₹5-20 lakh. This amplifies both profits AND losses — which is why most people lose money.
MIS vs CNC — Understanding the Difference
| Feature | MIS (Intraday) | CNC (Delivery) |
|---|---|---|
| Holding Period | Same day only | Unlimited |
| Margin | 5x-20x leverage | No leverage (100% payment) |
| Auto Square-off | 3:15-3:20 PM (broker closes) | No auto close |
| STT (Tax) | 0.025% (sell side only) | 0.1% (both sides) |
| Brokerage (Zerodha) | ₹20 or 0.03%, whichever less | Zero (delivery is free) |
SEBI Warning: According to SEBI's January 2023 study, 89% of individual traders in the equity F&O segment incurred losses during FY22. The average loss was ₹1.1 lakh per person. Only 11% made any profit, and even among them, the average profit was modest. Intraday trading requires skill, discipline, and risk management. Do not treat it as gambling.
Time Is Everything
The first hour (9:15-10:15 AM) and last hour (2:30-3:30 PM) see the most volume and clearest moves. The lunch hour (12:00-1:30 PM) is choppy and unpredictable. Trade when liquidity is high.
Leverage = Double-Edged Sword
With 10x margin, a 1% move against you wipes out 10% of your capital. A 5% gap down on opening = 50% capital gone. Never use full available margin — use 3-5x maximum.
Stock Selection Matters
Trade only liquid stocks in Nifty 50 or Nifty Next 50. Avoid illiquid small-caps — wide spreads and low volume make intraday nearly impossible. Daily volume should be above 10 lakh shares.
Stop Loss Is Mandatory
No intraday trade without a stop loss. Period. Define your SL before entering. Typical SL: 0.3-0.5% for large-caps, 0.5-1% for mid-caps. Risk no more than 1-2% of capital per trade.
Cost Awareness
Intraday has costs: brokerage (₹20/trade), STT (0.025%), exchange fees, GST. For a ₹5L turnover trade, costs are ~₹150-200. You need at least ₹250+ profit per trade to be net positive.
Emotional Discipline
Set a daily loss limit (e.g., ₹2,000). If you hit it, stop trading for the day. No exceptions. Revenge trading after a loss is the #1 reason intraday traders blow up their accounts.
Section 2: Best Times for Intraday Trading
Not all hours of the trading day are equal. Understanding when to trade and when to sit out is one of the biggest edges you can have.
The Intraday Trading Day
9:15 - 10:30 AM — The Golden Hour
This is when 60-70% of the day's volume happens in the first hour. Overnight news, global cues (US market close, SGX Nifty), and pending orders from the previous day create strong opening moves. Gap-ups and gap-downs present the best opportunities. The Opening Range Breakout (ORB) strategy works best here.
12:00 - 1:30 PM — The Danger Zone
Volume drops significantly during lunch. Price action becomes choppy and directionless. Small moves trigger stop losses, and false breakouts are common. Professional traders either take a break or significantly reduce position sizes during this period. If you find yourself repeatedly getting stopped out mid-day, just stop trading during lunch.
2:30 - 3:30 PM — The Closing Session
Volume picks up again as institutional traders finalize positions, mutual funds execute NAV-based orders, and F&O traders adjust positions before close. Strong directional moves in the last hour often continue the next morning. This is also when MIS auto-square-off happens (3:15-3:20), creating forced exits.
Section 3: Key Indicators for Intraday
VWAP (Volume Weighted Average Price)
VWAP is the single most important indicator for intraday. It calculates the average price of a stock weighted by volume throughout the day. Institutional traders use VWAP as their benchmark — they try to buy below VWAP and sell above VWAP.
- Price above VWAP = bullish bias (buyers in control)
- Price below VWAP = bearish bias (sellers in control)
- Price crossing VWAP from below = potential long entry
- Price crossing VWAP from above = potential short entry
9 EMA and 20 EMA
The 9-period and 20-period Exponential Moving Averages on a 5-minute chart are the standard for intraday trend identification. When 9 EMA is above 20 EMA, the short-term trend is up. When 9 EMA crosses below 20 EMA, the trend is flipping bearish. Use EMA crossovers as entry signals and VWAP as confirmation.
RSI (14-period)
On a 5-minute chart, RSI above 70 on a stock that has been rallying means it is overbought — expect a pullback. RSI below 30 on a falling stock means it is oversold — expect a bounce. But in strong trending moves, RSI can stay overbought/oversold for a long time. Use RSI divergence (price making new high but RSI making lower high) for the most reliable signals.
Section 4: Opening Range Breakout (ORB) Strategy
ORB is one of the most popular and effective intraday strategies in India. It works because the first 15-30 minutes of trading establish a range, and a breakout from this range often leads to a sustained move.
How to Trade ORB
- Wait for the first 15 minutes (9:15 - 9:30 AM). Do NOT trade during this time. Let the market establish the opening range.
- Mark the high and low of the 15-minute candle. This is your "Opening Range."
- If price breaks above the opening range high with volume — go LONG. Set stop loss at the opening range low.
- If price breaks below the opening range low with volume — go SHORT. Set stop loss at the opening range high.
- Target: 1:1.5 or 1:2 risk-reward. If your SL is ₹10, target ₹15-20 profit.
- Exit by 2:30 PM if your target is not hit. Do not hold MIS positions into the closing session unless you are in strong profit.
ORB Pro Tip: ORB works best on trending days (when Nifty opens with a gap). On flat, range-bound days, ORB produces false breakouts. Check India VIX — if VIX is above 15, the day is more likely to trend, making ORB more effective. If VIX is below 12, expect range-bound action and avoid ORB.
Section 5: STT and Cost Impact on Intraday
Many intraday traders underestimate costs. Let us calculate the real cost of a typical intraday trade:
| Charge | Rate | On ₹5L Trade |
|---|---|---|
| Brokerage (Zerodha) | ₹20 per order | ₹40 (buy + sell) |
| STT | 0.025% (sell side) | ₹125 |
| Exchange Charges | 0.00345% | ~₹35 |
| GST (on brokerage + exchange) | 18% | ~₹14 |
| SEBI Turnover Fee | 0.0001% | ~₹1 |
| Stamp Duty | 0.003% (buy side) | ~₹15 |
| Total Cost | ~₹230 |
For a ₹5 lakh trade, you need at least ₹230 in profit just to break even. That is 0.046% of your trade value. If you do 5 trades a day, that is ₹1,150 in daily costs — ₹24,000+ per month. This is why you need a clear edge and should not overtrade.
Common Mistakes Intraday Traders Make
Mistake: Overtrading (10+ trades per day)
Fix: Take 2-3 high-conviction trades maximum. More trades = more costs, more stress, more errors. Quality over quantity. Your best days will have just 1-2 trades.
Mistake: No stop loss or moving the stop loss further away
Fix: Set your SL before entering. Once set, NEVER move it further away to "give the trade more room." If the trade hits SL, exit. Accept the loss and move on.
Mistake: Trading during the lunch hour (12:00-1:30 PM)
Fix: Volume drops 60-70% during lunch. Spreads widen, moves are choppy, and false signals are common. Take a break. Go for a walk. Come back at 2:00 PM refreshed.
Mistake: Using full available margin
Fix: If your broker offers 20x margin, using it means a 5% adverse move wipes out your entire capital. Use maximum 3-5x. Keep a margin buffer for unexpected moves.
Mistake: Revenge trading after a loss
Fix: After a losing trade, the urge to "make it back" leads to emotional, oversized trades. Set a daily loss limit (e.g., ₹2,000). Once hit, shut the terminal. No exceptions.
Mistake: Converting intraday to delivery when the trade goes against you
Fix: If your MIS trade is losing, converting it to CNC (delivery) just delays the loss and ties up more capital. If the trade thesis is wrong, exit. Do not marry losing positions.
Practice: Try This Today
Hands-on exercises
- 1.Paper trade the ORB strategy for one week. Mark the 15-minute opening range for 3 Nifty 50 stocks each day. Note where breakouts happen and whether they sustain. Do NOT use real money yet.
- 2.Add VWAP to your chart (most brokers have it). For one day, only take trades in the direction of VWAP — long above VWAP, short below VWAP. Note your win rate.
- 3.Calculate the exact cost of your last 10 intraday trades from your contract notes. Were you profitable AFTER costs? Most traders are surprised by the answer.
- 4.Set a strict rule: no trading between 12:00-1:30 PM for one full week. Track your P&L before and after this change. You will likely see improvement.
Key Takeaways
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