What is Intraday Trading? How to Get Started, Advantages, Tips
Trading costs made the average loser's loss 57% worse. They took 19% of the average winner's profit.
Those are SEBI's FY23 numbers for individual intraday trading in the equity cash segment, published in July 2024. In the same year 71% of those traders lost money.
That asymmetry is the thing to understand first, because it is what makes the activity hard in a way that is not obvious.
What is Intraday Trading?
Intraday trading means buying and selling the same security on the same trading day. Nothing is carried overnight.
Every open position is squared off before the market closes, and if you do not close it your broker will.
The intraday trading meaning is therefore narrower than day trading in general. The defining feature is the deadline, not the speed.
How Does Intraday Trading Work?
You place a buy or a sell order and the opposite one before the close, and the difference after costs is your result.
Margin has to be there before the trade, not after it. Your broker must collect it upfront, and the clearing corporation checks by taking at least four random snapshots of margin during the session.
That is a tighter regime than many new traders expect, and it exists because same-day positions can move a long way before anyone squares them off.
Also Read: If you want to understand how buying and selling securities works beyond same day positions, read about Cash Trading in the Stock Market.
How to Start Intraday Trading?
Open a trading and demat account, complete KYC, and enable the intraday product your broker offers.
Fund it for margin rather than the full value of the position, and treat the margin as a requirement rather than a spending limit.
Work out your round-trip cost per trade in rupees before your first order, because that number sets the smallest move that can pay.
Then start smaller than you think you need to.
Advantages of Intraday Trading
Nothing is held overnight, so a position cannot gap against you while the market is shut and you cannot act.
Capital is not locked up for long, because it is available again the same evening.
You find out quickly whether an approach works, rather than waiting quarters.
Each of those cuts the other way, because frequent trading means frequent costs, and the SEBI data shows exactly how that lands.
Risks and Challenges of Intraday Trading
The regulator has measured this activity, and the numbers are the risk section.
In FY23, 71% of individual intraday traders in the equity cash segment incurred net losses. Among those who traded very frequently, more than 500 times in the year, the proportion of loss-makers rose to 80%.
Costs are the mechanism. Loss-makers made their losses 57% worse through trading costs, while profit-makers gave up 19% of their profits to the same charges.
Even the winning is modest, with average profit among profit-makers at ₹5,989 for the year against an average loss of ₹5,371.
Tips for Intraday Trading for Beginners
These are limits rather than techniques, because the data points at limits.
Trade less often than you want to, because the loss rate is worse among the most frequent traders, not better.
Know your cost per round trip in rupees, and treat it as the minimum move you need.
Set the exit before you enter, and size the position so a bad day is survivable.
Intraday Trading Strategies are worth studying, but no strategy outruns a cost base that is too high for the size you trade.
Intraday Trading vs Long Term Investing
They are different activities that happen to use the same screen and the same account.
Long term investing asks you to be right about a business over years, and lets compounding do work you need not repeat daily.
Intraday trading asks you to be right about a price today, then asks again tomorrow. Costs arrive every time you are asked.
Intraday Trading vs Delivery Trading sets out the settlement and margin differences in more detail.
Is Intraday Trading Suitable for Beginners?
The data says be careful. In FY23, 48% of these traders in the equity cash segment were under 30, against 18% in FY19, so many people starting out choose it.
In that same year, seven in ten of them lost money.
None of that makes it forbidden. It does mean a beginner should treat the first months as tuition, use money they can lose, and judge themselves on process rather than one good week.
Conclusion
This is buying and selling within one session, and its central difficulty is arithmetic rather than nerve. Costs land on losers 57% harder than they land on winners, and trading more often pushes you toward the group they land on.
SEBI's study measured this exact activity, and the figures above are its FY23 findings.
Margin rules and charges are published by the exchange and your broker before you trade. None of that removes the risk of loss on the position.
