Everybody in the stock market wants to become a millionaire within a night or should I say within a “trading day”. Thus, the concept of intraday trade has become so popular yet not completely understood by the traders but what is the best intraday trading time in India.
Intraday Trading Time in India
Now, as you all know, the Indian markets open at 9:15 am and close at 3:30 pm. But interestingly you cannot place an order till the last moment.
Also, intraday orders cannot be placed in the pre-market session from 9:00 am to 9:15 am.
So, what exactly is the intraday trading time?
Now there are many reasons why traders cannot place their trades in the pre and late market hours for intraday positions.
One such is the auto square-off mechanism of brokers. It is a risk management mechanism that closes all your open positions by 3:15 at the prevailing market price.
So intraday traders get to place orders between 9:15 am to 3:15 pm, a total of 6 hours of volatile trading. You can place intraday trades on various phases or stages of the stock market.
- The first phase is the opening phase of 30-35 minutes from 9:15 am. The volatility is high due to the previous night’s news. That’s the major reason for the market opening gap up or gap down in the opening session.
- The second phase for intraday trading time is 10:00 am to 11:30 am, the time when morning volatility subdues. This phase is good for beginners to enter the market.
- The third phase is the afternoon session from 12:00 to 2:30 pm. The focus of the market and the interested traders is on the specific global news and it’s around the time when European markets open.
- The last phase is the closure phase from 2:30 pm to 3:30 pm. In such a time entering into new positions may be risky but it is a paradise and hell for option and futures traders on a date of expiry in the share market, due to extreme volatility.
Option Trading Intraday Time
Let’s discuss the best timing for intraday trading in the most favorite segment of our Indian traders, the options market. A lot of traders who want to learn options trading dive into this market due to its volatility and quick change in prices.
This derivative segment also has three phases. The morning phase is from 9:15 to 11:00 am when the volatility and liquidity are high.
Then comes the afternoon phase when the market subsides a little and a clear identification of trends is possible.
The last phase is the notorious closure phase, 2:30 pm to 3:30 pm. This phase has the most volatility due to the expiry of various contracts on different dates.
|Intraday Trading Time for Options Trading|
|Phase 1||9:15 AM – 11:00 AM|
|Phase 2||12:00 PM – 2:30 PM|
|Phase 3||2:30 PM – 3:30 PM|
You should carefully choose between the stock market index and stock option as on one side index options have greater liquidity due to increased trader participation, on the other side stock options are more volatile.
Intraday Commodity Trading Time
Other than the stock market we also have a commodity market, where soft and hard commodities such as coffee, cotton, iron and steel are traded.
These markets are open from 9:00 am to 11:55 pm for non-agricultural commodities such as steel, iron, and gold.
Whereas the agricultural commodities markets such as cotton, sugar, and coffee are open from 9:00 am to 5:00 pm.
There are two trading sessions in commodity markets, namely the morning session from 9:00 am to 5:00 pm and the evening session from 5:00 pm to 11:30/11:55 pm.
When there is an overlap between two trading sessions such as an overlap between European and Asian markets, it leads to increased trading activity.
Intraday Trading Forex Time Frame
We also have a forex market also known as the foreign exchange market. It is open from 9:00 am to 5:00 pm.
|Intraday Trading Time for Currency Trading|
|Currency Trading Time||9:00 AM – 5:00 PM|
For increased profits during intraday in the forex market, traders should choose a highly liquid currency pairing.
The day traders generally follow a time frame from 4 to 6 hours within the forex market hours to identify broader trends.
Scalpers tend to use shorter time frames like 5 to 15 minutes and they set a tight exit point after entering into a trade.
Intraday Trading Time Frame
Now we look at the suitable time frame for intraday trading. As we know traders can place trades from 9:15 am to 3:15 pm, the aim should be to find a favorable setup at the right time as in volatile or nonvolatile time based on traders’ nature.
The time frame for intraday trading is the first or the last hour of the market, as in the morning from 9:15 to 10:15 there is a phenomenon called the “ dumb money phenomenon ”.
This phenomenon happens as people or so-called traders are making best guesses based on old or previous night’s news.
The movement that the stocks give in the first hour also usually proves to be the largest move of the whole day. After 11:00 am the trades occur in small volume in the market.
1- Minute Time Frame Trading
Whether it is a scalper or a day trader, each trader prefers a different time frame as it suits their risk-reward appetite. Now on one side, we have shorter time frames like 1 minute, 3 minute and 5 minute, usually used by scalpers.
- Capitalize on quick price fluctuation.
- Fast position square-off.
- In trending markets, more probability of hitting profits.
- By taking position again and again, if the majority of trades hit the target you can earn great profits.
- Due to more frequency of trades, there is a high transaction cost.
- More mental pressure due to constant monitoring of various positions.
- It leads to overtrading if traders try to get revenge from the market.
- Less wins, more losses.
- Less planning and more emotion-driven trades.
15-Minute Time Frame Trading
Then comes the longer time frames like 15 minutes, 30 minutes, or even 1 hour, used by day traders.
A day trader should focus on the 15-minute candle on the chart. As it gives a better opportunity to capitalize on big moves, watching it on a daily time frame gives the trader a broader perspective of the prevailing trends in the market.
15-minute candles tell OHLC i.e. open, high, low and close of 15 minutes of price movement in the market. It tells whether the buyers are aggressive or the sellers have taken charge in the market.
- Low transaction cost due to minimal trades.
- Helpful in clearer trend identification.
- Capitalize on large moves.
- Less monitoring time is required.
- A better risk-to-reward ratio is possible.
- Setup takes time to complete.
- Trades may reverse due to reversals in the market.
- Takes time to identify clear trends, and may miss entry.
- Limited profits in a single trade.
Now that we know the pros and cons of different time frames, we now know which time frame candle the trader should focus on.
Which Time Frame Chart Is Best For Intraday Trading
The best time to place intraday trades is either 9:30 to 10:30 or from 2:30 pm to 3:15 pm. In these time frames the liquidity and volatility both are high and traders generally try to make the most out of both these time frames.
Scalpers who usually place 10-15 trades in a day use shorter time frame charts such as 3-5 minutes whereas day trades who usually place 2-3 trades have best time frame charts of 15-30 minutes along with price-action based trading.
You must not forget that choosing the right time frame is crucial for the implementation of a particular intraday trading strategy.
After all this exposure you now should know which type of trader you want to become and how to benefit from different time frames to be profitable in intraday trading.
After knowing what is the best time setting for intraday trading, it is high time to dive into this world. As a measure of safety. It is always better to start with a small amount of capital.
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