1. What is Intraday Trading and How Does It Work in India?
In the Indian stock market (NSE and BSE), intraday trading refers to executing positions with product types like MIS (Margin Intraday Square-off) or Cover Orders. If you buy shares at 09:30 AM, you must square off (sell) the shares before your broker’s auto-square-off cutoff (typically between 03:15 PM and 03:25 PM IST).
Brokers provide leverage (typically 4x to 5x margin) on intraday cash positions under SEBI peak margin regulations. While leverage magnifies upside potential, it equally magnifies potential downside drawdowns. Beginners must treat leverage with profound respect.
2. Stock Screening: How to Pick the Best Stocks for Intraday Trading
Beginner traders frequently make the mistake of trading low-volume penny stocks where wide bid-ask spreads devour profits. A disciplined day trader screens stocks using three objective criteria:
A. High Daily Liquidity: Focus strictly on F&O-enabled securities or Nifty 100 stocks with average daily turnover exceeding ₹100 Crores.
B. Volatility & Average True Range (ATR): Choose stocks with an ATR percentage above 1.8% to ensure sufficient intraday price range to reach 1:2 targets.
C. Relative Strength vs Nifty: If Nifty is falling, look for stocks holding up green at day highs (relative strength) for long setups.
Check Gift Nifty trend -> Review corporate earnings announcements -> Mark previous day high (PDH) and low (PDL) -> Calculate Central Pivot Range (CPR) levels.
3. The Psychological Trap of Overtrading & Revenge Trading
The single most lethal enemy of an intraday trader is emotional reactivity. After taking a morning loss, undisciplined traders double their lot size to "win back" their money. In trading psychology, this is known as revenge trading.
Professional desks enforce a strict Daily Max Loss Limit (e.g. ₹2,000 or 2% of capital). Once this loss threshold is touched, terminal screens are locked until the next market session.
Your objective in the first 12 months is not to make quick riches; it is to survive and protect your principal capital until your technical edge sharpens.
