Intraday Trading Strategies & Tips: A Guide for Beginners & Experienced Traders

Intraday trading strategies are used by traders who buy and sell stocks within the same day to capitalise on short-term price movements. These strategies are important because they help intraday traders in making decisions, managing market volatility, and enhancing trade planning. Some common types include momentum, news-based, breakout, and reversal approaches, each with a specific market logic. Intraday trading involves taking positions and closing them before the market closes; this contrasts with long-term investing, where traders carry their trades forward for many days, weeks, or months. 

12 Best Intraday Trading Strategies 

The following are the best intraday strategies to optimise financial gains: 

1. Momentum Trading Strategy 

Traders buy assets showing strong upward price momentum and sell those losing strength. The idea is that trends tend to continue for a while before reversing. Indicators like the Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), or volume spikes confirm momentum. Timing entries and exits is crucial to capture the strongest moves. 

2. Breakout Trading Strategy 

This strategy targets price movements that break through key support or resistance levels. A breakout signals the start of a new trend or a continuation of an existing one. Traders enter as the breakout occurs, often confirmed by high volume. Stop-losses are placed just below/above the breakout point to manage risk. 

3. Reversal Trading Strategy 

Traders aim to profit from points where a trend is about to change direction. They look for overbought or oversold signals using RSI, MACD, or candlestick patterns. It requires patience and confirmation before entering against the current trend. Stops are set tightly since false reversals are common. 

4. Scalping Trading Strategy 

Scalping focuses on making many small trades to capture tiny price movements. Trades last seconds or minutes, requiring high liquidity and tight spreads. It’s often used in forex or Contract for Difference (CFD) with high leverage. Speed, precision, and discipline are key to consistent profits. 

5. Moving Average Crossover Strategy 

This uses two Moving Averages (MA), one short-term, and one long-term. A buy signal occurs when the short-term MA crosses above the long-term MA. A sell signal occurs when it crosses below. It helps identify trend reversals or trend confirmations objectively. 

6. Gap and Go Strategy 

This strategy targets stocks that “gap” up or down at market open. The gap often results from news or earnings, signalling strong momentum. Traders enter in the direction of the gap, aiming to ride early volatility. Tight risk management is needed as gaps can quickly reverse. 

7. Pivot Point Strategy 

Pivot points act as key price levels for potential support or resistance. Traders calculate them from the previous day’s high, low, and close. They use these levels to identify entry, exit, or reversal points. This is usually considered the best intraday strategy for short-term market predictions. 

8. Pull Back Trading Strategy 

Traders wait for a temporary dip (pullback) within a larger trend. They enter trades in the direction of the main trend after the pullback ends. It offers better entry prices and reduced risk than chasing trends. Fibonacci levels or moving averages often help identify pullbacks. 

9. Bull Flag Trading Strategy 

A bull flag forms when a strong upward move pauses and consolidates. The flag is a short down-sloping channel following a sharp rally (the “pole”). Traders enter when price breaks out of the flag, expecting continuation upward. It is a popular pattern for momentum and breakout traders. 

10. CFD Strategy 

CFD trading allows traders to speculate on price movements without owning the asset. Profits or losses are based on the difference between entry and exit prices. It enables leverage, letting traders control large positions with small capital. However, high leverage increases both potential gains and risks. 

11. News-Based Trading 

News-based trading means responding to economic updates, announcements of earnings, policy changes, or big business events that can immediately affect stock prices. Traders will search for the rapid movement of prices after news releases and identify opportunities through rising or falling momentum. Traders should be aware of current news, and following the market may help them select relevant stocks for the day. 

12. Pair Trading Strategy 

Pair trading identifies two historically correlated stocks. When one stock starts moving faster than the other and a price gap appears, traders buy the weaker one and sell the stronger one. Expecting the price difference to narrow again. At that stage, the trader exits when the prices realign to take advantage of temporary mispricing. 

Best Technical Indicators for Intraday Trading 

The following are some technical indicators for intraday trading: 

• Essential Intraday Indicators: The most reliable intraday indicators include moving averages (5, 20, 50-period), RSI, MACD, Bollinger Bands, and Volume Weighted Average Price (VWAP). Combining 2-3 indicators helps confirm trade signals and reduce false entries. 
• RSI Intraday Application: RSI intraday settings work best with a 14-period configuration. Readings above 70 indicate overbought conditions (potential sell signal), while readings below 30 suggest oversold conditions (potential buy signal), especially effective at support/resistance zones. 
• Decoding MACD Signals: MACD signals are generated when the MACD line crosses above or below the signal line. Bullish crossovers above the zero line indicate strong upward momentum, while bearish crossovers below suggest downward pressure. 
• Mastering VWAP Strategy: The VWAP strategy uses the volume-weighted average price as a dynamic support/resistance level. Prices above VWAP indicate bullish sentiment (look for long positions), while prices below suggest bearish conditions (consider shorts). 
• Combining Multiple Indicators: Use a layered approach where one indicator confirms another. For example, enter a long trade when the price is above VWAP, RSI shows oversold recovery, and MACD gives a bullish crossover. 
• Avoiding Indicator Overload: While indicators are helpful, cluttering your charts with too many can cause analysis paralysis. Stick to 2-4 complementary indicators that provide different perspectives (trend, momentum, volume) 

Core Principles of Successful Intraday Trading 

The following are the core principles of successful intraday trading: 

1. Master Intraday Timing: Understanding the best intraday timing is crucial. The first hour (9:15-10:15 AM) and last hour (2:30-3:30 PM) typically offer the highest volatility and trading opportunities, while mid-day sessions can be slower and less predictable. 
2. Implement Strict Risk Management: Effective risk management is the backbone of sustainable trading. Never risk more than 1-2% of your capital on a single trade, always use stop-loss orders, and maintain a favourable risk-reward ratio of at least 1:2. 
3. Navigate Market Volatility: Learn to read and adapt to market volatility rather than fear it. Volatile markets create opportunities but also require tighter stop-losses and quicker position adjustments to protect your capital. 
4. Develop a Trading Plan: Successful traders follow a predetermined plan that includes entry and exit criteria, position sizing, and daily loss limits. This removes emotional decision-making from the equation. 
5. Focus on Liquid Stocks: Trade only high-volume, liquid stocks that allow easy entry and exit without significant slippage. Illiquid stocks can trap you in positions during critical moments. 
6. Maintain Trading Discipline: Consistency comes from sticking to your intraday trading rules with discipline, even during losing streaks, from avoiding revenge trades, and from knowing when to step away from the screen. 

Common Mistakes to Avoid in Intraday Trading 

The following are some common mistakes to avoid in intraday trading: 

• Ignoring Intraday Trading Mistakes: The most frequent intraday trading mistakes include overtrading, holding losing positions hoping they will recover, and trading without top-losses. Recognising these patterns in your behaviour is the first step to improvement. 
• Overcoming Day Trading Errors: Common day trading errors include revenge trading after losses, trading with emotions rather than logic, and increasing position sizes after wins. These behaviours destroy accounts faster than bad market reads. 
• Lacking Trading Discipline: Without trading discipline, even the best intraday trading strategy may fail. This means following your plan religiously, not chasing trades, accepting small losses gracefully, and maintaining consistent position sizing regardless of recent performance. 
• Trading Without Preparation: Jumping into trades without analysing pre-market conditions, news events, or setting up your watchlist leads to impulsive decisions. Spend 15-30 minutes before the market opens to plan your day. 
• Ignoring Risk-Reward Ratios: Taking trades with poor risk-reward ratios (likes risking ₹10,000 to make ₹5,000) leads to significant losses over time. Always ensure your potential profit is at least twice your potential loss. 
• Failing to Keep a Trading Journal: Not maintaining a trading journal prevents you from learning from your mistakes. Document every trade with entry/exit reasons, emotions felt, and outcomes to identify patterns in your trading behaviour. 

Conclusion  

To be profitable, you must choose an appropriate intraday trading strategy. Some of the most popular and effective intraday trading strategies are momentum, breakout, reversal, scalping, moving average crossover, gap and go, and pivot points. Moreover, the reversal trading strategy is considered one of the challenging intraday trading strategies because you are going against the trend instead of going with it. 

Different rules and methodologies exist for different intraday trading strategies, depending on market conditions and trader preferences. Still, choosing the right strategy is not the only thing that matters in intraday trading. Traders must stay on top of market trends, monitor technical indicators, and adjust their intraday trading strategies with a reliable stock market app.