This lesson from the Advanced Module of Advanced Stock Market Trading – Level 1 dives deep into intraday trading—a fast-paced strategy used by professional and retail traders alike. You'll learn key concepts, trading strategies, and practical examples to help you master the art of making profits within a single trading day.
Intraday trading refers to the practice of buying and selling stocks within the same trading day. Unlike long-term investing, the goal is not ownership but profit from price movements during the session. This method relies on market volatility and timing rather than holding positions overnight.
To start intraday trading, you must have an online trading account. When placing trades, you must clearly mark your orders as intraday. All trades are squared off before market close. That’s what makes it intraday.
Example:
Buy 100 shares of ABC Ltd at 10:15 AM → Sell same 100 shares before 3:30 PM.
How to Do Intraday Trading
- Trade with the trend – If the market is falling, short-sell and buy back later.
- Set limits – Define your profit and stop-loss levels.
- Avoid the first hour – The market is volatile as it sets its opening range.
- Use liquid stocks – Stick to stocks with high volume.
- Follow a trading plan – Consistency beats emotion.
Intraday Trading Tips
- Stick to your entry, exit, and stop-loss points.
- Avoid greed—book profits at targets.
- Never risk more than you can afford to lose.
- Intraday trading is risky; treat it like a business, not a gamble.
Key Intraday Trading Indicators
- Moving Averages
- Relative Strength Index (RSI)
- Bollinger Bands
- MACD
- VWAP
Use these tools in tandem with a sound strategy to improve timing and accuracy.
Intraday Time Analysis
Daily charts (1-day interval) show stock price movements during a trading session. These charts help identify trends, support, and resistance—crucial for timing trades.
How to Pick Stocks for Intraday Trading
- High liquidity
- Volatility in price
- Sector or news-driven movement
- Strong correlation with major indices
Poor stock selection leads to missed opportunities or losses. Focus on liquid and trending stocks.
Price Gaps in Intraday Trading
Price gaps occur when the opening price is different from the previous day's close.
Types of gaps:
- Full Gap Up: Opens above previous high
- Full Gap Down: Opens below previous low
- Partial Gap Up: Opens above previous close but below prior high
- Partial Gap Down: Opens below previous close but above prior low
These gaps present trading opportunities when analyzed properly.
Gap Trading Strategies
Full Gap Up Long:
- Revisit after 10:30 AM
- Buy stop = 2 ticks above high of first hour
Full Gap Down Long:
- Buy if bounce occurs
- Set stop = 2 ticks above yesterday’s low
Partial Gap Up/Down:
- Use same post-10:30 AM analysis
- Set long/short stops relative to high/low of first hour
Key Rule: Higher the volume + larger the gap = stronger the trade signal.
Example: S&P 500 Trading System
A trading system combines indicators, market data, and predefined rules to generate trade signals. It may use tools like:
- Excel
- R / Python
- News feeds
- Technical and fundamental data
Example: RSI < 30 + Bullish MACD + High volume = Buy Signal
Gap and Go Strategy
Used when a stock gaps up in pre-market on high volume. Look for strong continuation after the opening bell.
Gap Trading Rules Summary:
- Gap size > 3%
- Daily volume > 2 million
- Use 1-minute candles
- Risk:Reward = 1:1
- Avoid dual-listed stocks
Summary
Intraday trading is about strategy, speed, and discipline. From understanding what is intraday trading to applying gap trading strategies, success lies in preparation and risk management.Ready to apply your knowledge in a real trading environment? Start trading with PROP365—offering smart tools, fast execution, and challenge accounts tailored for serious traders. Join now and sharpen your intraday trading skills under real market conditions.
