Intraday trading, often referred to as day trading, is a fast-paced trading strategy where traders buy and sell financial instruments, such as stocks, within the same trading day. Unlike long-term investing, intraday trading focuses on capitalizing on short-term price movements to generate quick profits. This approach requires a solid understanding of market dynamics, trading tools, and risk management strategies, making it both exciting and challenging for beginners and seasoned traders alike.
In this blog post, we’ll dive deep into the world of intraday trading through a structured learning journey. Whether you're new to trading or looking to sharpen your skills, this post offers valuable insights through interactive lessons, a Q&A format, and a hands-on demo interface. Here's what you can expect:
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Lessons and Q&A: We’ll cover key concepts of intraday trading across multiple lessons, including an introduction to intraday trading, margins and returns, types of intraday orders, and short selling. Each lesson includes questions, answers, and detailed explanations to help you grasp the fundamentals.
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Interactive Demo: At the end, you’ll find a fully functional intraday trading practice tool. This demo allows you to simulate a trading session, from adding funds to your wallet to buying and selling stocks, complete with a live candlestick animation to mimic real market movements.
By the end of this post, you’ll have a solid foundation in intraday trading and practical experience through the demo tool. Let’s get started!
Lesson 1: Introduction to Intraday Trading
Q1: Intraday trading, ...True or False?
Intraday trading, also known as day trading, involves buying and selling stocks within the same trading day. True or False?
A: True
Reason: Intraday trading, or day trading, refers to the practice of buying and selling stocks/bonds within the same trading day, with the aim of profiting from short-term price movements.
Participation: 3,13,497 people | Correct Answer: 96%
Q2: Sanjay purchased ...Intraday trade?
Sanjay purchased 10 stocks of Reliance at ₹2,350 per share on 24 April 2023 at 10 AM. He sold them at ₹2,380 per share at 2:15 PM, same day. Is this an Intraday trade?
A: Yes
Reason: This is an intraday trade because Sanjay bought and sold the stocks within the same trading day.
Participation: 3,05,581 people | Correct Answer: 92%
Q3: Rajat buys 10 ...Rajat's trade?
Rajat buys 10 stocks of Reliance at ₹2,350 per share on 24 April 2023 as an intraday order. At 2:15 PM, Rajat looks at the price of the share as ₹2,380. He decided not to trade and sell. The market closes at 3:30 PM and the share price of Reliance on this day at the close is ₹2,358. What happens to Rajat's trade?
A: Order got auto sold off at the close of the market
Reason: Because Rajat did not take a decision, at the close of the market, the 10 Reliance shares got auto sold at ₹2,358. This is known as squared off.
Participation: 2,95,054 people | Correct Answer: 74%
Q4: Sanjay has ₹1,000 ...Can Sanjay buy?
Sanjay has ₹1,000 in his stocks wallet. He wants to buy ₹5,000 worth of stocks under Intra-day order on INDmoney even though he only has ₹1,000. Can Sanjay buy?
A: Yes
Reason: With INDmoney, under intraday trade, Sanjay can get up to 5x boost on his wallet to buy more with less money. He can absolutely buy ₹5,000 worth of stocks under Intra-day order on INDmoney despite having only ₹1,000 in his stocks wallet.
Participation: 2,90,096 people | Correct Answer: 74%
Q5: The advantages ...are:
The advantages of intra-day trading are:
A: All of the above (Quick profit, Upto 5x higher amount, High level of liquidity)
Reason: Intra-day trading offers unique potential for quick profits and high liquidity by capitalizing on short-term price movements. At INDmoney, a trader can also get a 5x boost on his/her wallet to buy more with less money.
Participation: 2,85,686 people | Correct Answer: 54%
Lesson 2: Margins and Returns
Q1: Sanjay has ₹10,000 ...he can trade?
Sanjay has ₹10,000 in his stocks wallet. He gets 5x trading booster to be able to buy stocks under intra-day order type. What is the maximum value of stocks he can trade?
A: ₹50,000
Reason: With 5x trading booster on his wallet balance of ₹10,000, Sanjay can trade up to ₹50,000 (5 * ₹10,000).
Participation: 2,60,300 people | Correct Answer: 71%
Q2: Rajat has ₹100 ...that Rajat made?
Rajat has ₹100 in his stocks wallet. His intraday booster gives him an ability to buy stocks worth ₹500. He buys stock A for ₹500 at 10 AM. The stock goes up by 2% at 2:30 PM to ₹510. Rajat sells the same and makes a profit of ₹10 on his ₹100 invested. What is the return that Rajat made?
A: 10%
Reason: Rajat made a profit of ₹10 on his stocks wallet balance of ₹100. This translates to a 10% return (10/100).
Participation: 2,47,225 people | Correct Answer: 65%
Q3: Rajat has ₹50 ...did Rajat make?
Rajat has ₹50 in his stocks wallet. His intraday booster gives him an ability to buy stocks worth ₹250. He buys stock B for ₹250 at 10 AM. Stock B goes up to ₹252 at 2:00 PM. Rajat does not sell and waits for the market to end. The stock price goes down to ₹249 at the close of the market and gets auto sold. How much profit or loss did Rajat make?
A: Loss of ₹1
Reason: Because Rajat did not take a decision, at the close of the market, stock B got auto-sold. Rajat made a loss of ₹1 (buying price of ₹250 and auto sold price of ₹249).
Participation: 2,36,510 people | Correct Answer: 58%
Q4: Sanjay has ₹100 ...on next day?
Sanjay has ₹100 in his stock wallet and 5x trading booster (₹500). Sanjay buys a stock worth ₹500 and sells for ₹520 making a profit of ₹20. Sanjay now has ₹120 in his stocks wallet. Can he get 5x trading booster i.e ₹600 on next day?
A: Yes
Reason: Sanjay's profit of ₹20 will get added to his stock wallet at the end of the day and the next day he can get a 5x boost on his ₹120 wallet balance, which is ₹600.
Participation: 2,32,334 people | Correct Answer: 91%
Q5: Sanjay has ₹100 ...this auto stock?
Sanjay has ₹100 in his stocks wallet. He has a 5x intraday trading booster which enables him to buy stocks worth ₹500. Sanjay decides to buy an auto share at a value of ₹50 by just using ₹10 from his stock wallet. How much wallet balance will he be left with after buying this auto stock?
A: ₹90
Reason: Sanjay used ₹50 from his intraday booster to place an intraday trade by utilizing ₹10 from his wallet balance. His stocks wallet balance will be ₹90 (₹100-₹10).
Participation: 2,28,130 people | Correct Answer: 52%
Lesson 3: Practice Intraday Trading
Q1: Can we practice intraday trading in a simulated environment?
Yes! You can use this tool to experience a simulation similar to the INDMoney app's intraday trading interface.
A: Yes, through a practice tool.
Reason: This tool provides a real-time intraday trading scenario, helping you understand market fluctuations and trading strategies without financial risk.
Participation: 1,25,638 people | Positive Feedback: 89%
Start Practicing!Lesson 4: Types of Intraday Orders
Q1: Sanjay uses ₹100 ...set this up?
Sanjay uses ₹100 of his stock wallet balance to buy 1 share of company A worth ₹500 under intra-day order. Sanjay wants to cap his maximum losses to just ₹2. How can Sanjay set this up?
A: Yes, By STOPLOSS order
Reason: To limit his losses at ₹2, Sanjay can set a stop-loss order at ₹498. This will automatically trigger a sale if the stock price drops to ₹498, helping him manage his risk effectively.
Participation: 1,51,972 people | Correct Answer: 91%
Q2: Rajat places a ₹500 ...will place?
Rajat places a ₹500 intraday order for a stock. He wants to cap his maximum loss to just ₹10. What will be the value of stop loss order that Rajat will place?
A: ₹490
Reason: Rajat can set a stop-loss order at ₹490 (₹10 lower than the purchase price) for his ₹500 intraday stock purchase to cap his losses at ₹10. The order will trigger if the stock price drops to ₹490, automatically selling his shares.
Participation: 1,50,919 people | Correct Answer: 85%
Q3: Arjun has ₹100 ...will Arjun place?
Arjun has ₹100 in his stock wallet with a ₹500 intraday booster. He wants to buy a stock which is currently trading at ₹502. Arjun wants to buy the stock only when it hits ₹498 or below. What kind of order will Arjun place?
A: Limit order
Reason: To buy the stock at ₹498 or below, Arjun will place a limit buy order for the stock at ₹498. If the stock price drops to this level, the order will trigger automatically and stock will be bought.
Participation: 1,50,403 people | Correct Answer: 67%
Q4: What type of order ...price?
What type of order is executed immediately at the best available current price?
A: Market order
Reason: A market order is an instruction to buy or sell a financial instrument immediately at the best available current price.
Participation: 1,50,014 people | Correct Answer: 70%
Q5: Sanjay wants to ...he use?
Sanjay wants to buy shares of Company D but only if the stock price falls to ₹150. He also wants to sell the shares automatically if the price reaches ₹170 or falls to ₹140. Which order type should he use?
A: Bracket order
Reason: A bracket order combines a limit order (buy at ₹150) with a stop-loss order (sell if the price falls to ₹140) and a target price (sell if the price reaches ₹170).
Participation: 1,49,545 people | Correct Answer: 66%
Lesson 5: Short Selling
Q1: You sell a ...True or False?
You sell a stock without owning it and with a hope that the stock price will fall during intraday. You then buy the stock at the price lower than the sell price. This is known as short selling during intra-day. True or False?
A: True
Reason: Short selling is a trading strategy that involves selling a stock that you do not own, with the expectation that its price will decrease in the future. Once the price has dropped, the seller buys back the same number of shares. The difference in selling and buying price is profit or loss.
Participation: 1,33,700 people | Correct Answer: 93%
Q2: You decide to short ...you make?
You decide to short sell a stock at a price of ₹202 at 10 AM. At the time of market closing, share price rose to ₹210. The order got auto squared off. How much profit/loss will you make?
A: ₹8 loss
Reason: In this case, the selling price was ₹202 and the buyback price was ₹210, so: Loss = ₹210 - ₹202 = ₹8.
Participation: 1,33,074 people | Correct Answer: 36%
Q3: You decide to ...will you make?
You decide to short-sell a stock at a price of ₹410 at 10 AM. At 2 PM, the price goes down to ₹400 and you buy it. How much profit/loss will you make?
A: ₹10 profit
Reason: If you short-sell a stock at ₹410 and buy it back at ₹400, you make a profit of ₹10 per share. To calculate the profit or loss, we subtract the buyback price from the selling price. In this case, the selling price was ₹410 and the buyback price was ₹400, so: Profit = ₹410 - ₹400 = ₹10.
Participation: 1,32,489 people | Correct Answer: 62%
Q4: Can you set-up ...Sell order?
Can you set-up Stop loss for a Short Sell order?
A: Yes
Reason: You can set a stop-loss order for a short sell order to limit potential losses if the stock price increases. For example, if you short-sell a stock at ₹500 per share and you want to limit your potential losses to ₹10 per share, you can set a stop-loss order at ₹510, limiting your loss to ₹10 per share.
Participation: 1,32,305 people | Correct Answer: 92%
Q5: Can you set-up ...sell order?
Can you set-up a limit order for a Short sell order?
A: Yes
Reason: A limit order for a short sell order is an instruction to buy back the shares at a specified price or higher, allowing the trader to exit the position with a profit. For example, you short-sell a stock at ₹500 per share and you want to lock in a profit if the stock price drops to ₹490. You can set a limit order at ₹490, allowing you to exit the position with a profit of ₹10 per share.
Participation: 1,32,150 people | Correct Answer: 93%