Intraday Trading Rules

Intraday trading rules help traders stay disciplined in a volatile market. They provide guidance on entry and exit trade, support effective risk management, and help control emotional decision-making. Rules like setting stop-loss orders, avoiding overtrading, and planning trades in advance may protect traders from sudden losses. With the right approach, intraday traders can improve their chances of making more consistent and informed trading decisions over time. This article explains intraday trading rules that can help traders become more experienced.  

15 Key Rules for Intraday Trading 

A trader in the stock market can earn or lose any amount, so there is no fixed limit on profits or losses. Following clear intraday trading rules might help traders avoid greed and fear and support long-term success. 

Rule 1: Trade at a Specific Time 

In intraday trading, the goal is to catch the right market movement. The market is open from 9:15 AM to 3:30 PM. Sometimes the day has better price movement. The best times for intraday trading are usually 9:30-1 AM and 1-2:30 PM. At other times, prices may move too little or become very unstable. 

Rule 2: Trade Only with a Proper Setup 

Traders should not trade randomly. They need a clear setup that outlines when to enter and exit a trade. When they follow their setup and its trigger points, they can trade with more confidence. 

Rule 3: Increase the Position Slowly 

Traders should start with a small quantity. As they gain confidence in their setup, they can slowly increase their position. Starting with a large position can cause big losses, which can reduce their confidence and trading capital. 

Rule 4: Choose Liquid and Volatile Stocks 

Liquidity is important in intraday trading. It means there are many buyers and sellers. If a stock is not liquid, traders may not be able to sell at their target price. This can force them to sell at a lower price and reduce profits. 

Rule 5: Close All Trades by 3:30 PM 

Many new traders hold their intraday positions for the next day, hoping the price will hit their target. But the price can also move down, causing bigger losses. So, traders should aim to close all intraday trades before 3:30 PM. 

Rule 6: Watch the Market Carefully 

Traders should keep an eye on all liqui Calibri d stocks they trade. Constantly watching the market helps them find opportunities and stay focused. Intraday trading needs attention because trades happen quickly. 

Rule 7: Never Trade on Hope 

Hope should not guide trading decisions. For example, if a setup gives a buy signal at Rs. 150 and a sell signal at Rs. 155, traders should sell at Rs. 155. They should not wait for Rs. 160 just because they “hope” the price will rise. Waiting too long can lead to losses. Traders should always follow their setup and avoid trading based on hope. 

Rule 8: Do Research 

Traders should check information about the stock, the sector, and the overall market before trading. Knowing the news, trends, and price movements helps them make better choices and avoid surprises. 

Rule 9: Use Stop-Loss Orders 

A stop-loss can help a trader protect their capital by limiting losses. Every trade should have a stop-loss to guard against sudden market changes. 

Rule 10: Choose Businesses, Not Just Stocks 

A trader should look at how strong and stable a company is before trading its stock. Well-known companies usually move in a more steady way. Underperforming or unknown companies can change unexpectedly. 

Rule 11: Do Not Borrow to Invest 

Traders should avoid using borrowed capital for intraday trading. Borrowing increases risk, and losses can grow very fast. It is safer to trade only with their own capital. 

Rule 12: Diversify Portfolio 

Even in intraday trading, it is better not to trade only one stock or only one sector. Having different stocks reduces risk and gives more trading opportunities. 

Rule 13: Take Calculated Risks 

Traders must plan their risks before entering a trade. They should know how much they can afford to lose. Emotional or rushed trading often leads to losses. 

Rule 14: Do Not Trade with a Confused Mind 

A trader should avoid trading when stressed, tired, or emotional. A calm mind helps them follow their plan and make better decisions. 

Rule 15: Trade With the Trend 

Traders should trade in the direction of the market trend. Going against a strong uptrend or downtrend can be risky. Following the trend may give safer and more reliable trades. 

Disclaimer: All investments are subject to market risks, economic conditions, regulatory changes, and other external factors. Returns are not guaranteed and may vary based on market performance and investment tenure. 

Conclusion  

Intraday trading rules may help reduce risk and improve a trader’s chances of doing well. Traders need a good trading setup, must choose liquid stocks, manage position size, and close all trades on time. Watching the market using a reliable stock market app also helps them make quick decisions. SEBI has updated some rules, including those related to margin and leverage, so traders must stay informed. Understanding these rules helps protect their capital and improve their overall trading method.