Intraday Trading Rules

Intraday Trading Rules

Day trading just like anything has its own set of rules that traders need to follow. These intraday trading rules are the ones that stand responsible for a trader’s performance in the stock market.

Abiding by these rules is not necessary by any means, however, following these will help a trader get the best out of their day trades. 

Intraday is hugely popular among beginners and experienced traders alike. Along with being the shortest format of trading in the stock market it also is the riskiest trading segment. 

Intraday Trading Rules in India

Traders, especially the ones trading for the first time tend to lose money more often, rather than make profits. Thus, it is advisable to be well aware of certain intraday trading rules. 

Following the rules below gives you a clear answer on how to select stocks for intraday. So without any delay, let’s begin.

1. Choose The Right Broker

The first and foremost step for a trader to get into intraday trading on the stock market is to have a trading account with a stockbroker. The traders have a host of options in terms of the variety of stockbrokers. 

However, finding the one that suits your trading needs is important to an investor’s cause. Having a stockbroker that provides facilities such as research tips, recommendations, market reports, charting tools, etc. 

This is one of the most important Intraday Trading Rules you should ideally be aware of and use in practice.

Learn more: Intraday Trading Tips

2. Research Trends

Trading just like any exam requires a revision of yearly books, notes to perform on the day of the exam. In order to execute an intraday trade, a trader needs to perform thorough research on stocks by studying the various charts to predict price trends.

Intraday traders should look to invest in stocks based on their performance in recent times. The stock prices keep varying all the time, thus, staying updated with the stock price trends is critical for carrying out intraday trades.

3. Businesses Over Stocks

An unknown yet high performing stock might emerge out of nowhere and may even get a lot of attention from traders. However, a wise intraday trader will never fall for such stocks. 

A wise intraday trader will always as a rule choose the stock of a well-established business rather than the well-performing stock of a relatively unknown company. 

Even if it is an unknown company make sure to do in-depth research on the company’s history, its stock offerings, data that may help in understanding the business better.

Remember this Intraday Trading Rule and you will never fail!

By the way, do you know how intraday trading works? You should learn about it.

4. Control Emotions 

Intraday trading isn’t exactly a place for emotions or rather decisions driven by emotions. Emotions tend to lengthen the thought process of an investor. An intraday trader can’t afford any delay in decision making. 

A trader might fear losses or feel greedy about making bigger profits, and want to reconsider his decisions, losing crucial time in the process. The intraday market moves so fastly that it requires a trader to act quickly on any opportunity he sees.

Any delay will see a trader lose out on potential profits.

5. Never Forget A Stop-Loss Order 

A trader might go into intraday trading with the motive of making profits on their investments, but it is just as crucial to be a little cautious of losses as well.

A stop-loss order helps a trader keep a check on losses. A trader sets a price after which the stock is automatically bought or sold. This ensures the trader doesn’t lose money more than he can afford to, while also protecting the trader’s profits.

Having a stop-loss order should therefore not be overlooked.

6. Trade With Surplus Money 

Another Day trading rule would be to never trade with borrowed money. The unstable nature of Intraday trading doesn’t guarantee profits for a trader. One can win money as well as lose money with equal ease.

Therefore, it is advised to day trade with the money that a trader can willingly part with. Taking too much leverage only adds to the risk of day trading.

7. Diversify Your Portfolio

This is one of the most obvious Intraday Trading Rules but not many people will tell you about it. This is seen as one of the trading fundas for long term investing only, however, this is pretty much applicable in the shorter format as well.

Instead of investing big in a couple of well-performing stocks, intraday traders should look to diversify their trading options. The best bet would be to invest in portions in a number of stocks. 

Many factors such as political, diplomatic, economic announcements have a direct impact on the stock market. The stock market can therefore rise and crash at any time of the day. 

The trader instead of investing in stocks of the same sector or business should look to invest across multiple sectors and businesses. 

8. Don’t Overtrade 

Having a diversified portfolio is one thing while taking positions on stocks. But trading in stocks more than what you can afford is overtrading that might result in major losses.

The stock market is volatile and stock prices do tend to move, but not all the time. The prices don’t move all the time and traders should only enter the market when the prices are beginning to take over the market. Invest when the stock prices are notable enough.

9. Take Calculated Risks

While we know Day trading requires a participant to “take calculated risks”. While this is a common phrase in trading circles, however not everybody seems to be sure about the right definition of the term. 

Risks can be calculated by an individual by taking into account parameters such as age, trading experience, knowledge about the stock, understanding of the stock market, etc. 

In truth, understanding the parameters will enable you to make a more refined trading decision. Just ensure that the profit is worth the risk.

10. Trade with a Plan 

Enter the stock market with a plan and try to stick to it. Invest in stocks you are sure about to a certain degree, otherwise, just back off. The stock market is full of rumors, and fake news. All these can possibly impact a trader’s decision. 

An intraday trader shouldn’t listen to any inauthentic, and inaccurate information sources. Take responsibility and learn the truth on your own. Follow the stock market trends closely.

11. Measure Your Profits 

While intraday traders enter the stock market with the motive of making profits and they can be making money to a certain extent. The stock market isn’t exactly a place to sit back, Intraday traders should look for ways to maximize their profits.

Analyzing your profits will help you in devising your intraday trading strategy. Measure the amount you earn per every trade to develop a better understanding of the areas you need to improve. 

12. Go With The Trend 

While there are instances when all the predictions about the stock market fail, and the stock prices suddenly change the direction. However, those instances aren’t regular and far less in number. 

While it is alright to look for breakouts and reversals but it is not possible to trade while predicting that possibility. A trader should look for trends and make the most out of their trades by following the stock trends.

In intraday trading usually, when a stock starts moving in a direction, it follows the same path throughout the day. The short span of a single day usually isn’t enough time for stocks to recover.


Intraday trading offers a great opportunity to make profits. With all the benefits the day trading has to offer, one thing that remains constant is the fact that Intraday is the most fast-paced and risky trading segment.

No doubt intraday is a rewarding proposition. However, in order to reap the benefits of online trading, a trader needs to be well aware of some of the top intraday trading rules and that is exactly what we have tried to explain here. 

Adopting the rules mentioned in this piece definitely will stand a trader in good stead.

Furthermore, you must ideally be going through some of the top stock market courses available on our app – Stock Pathshala where we provide curated courses from the Industry experts in different media formats.

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