Short answer: Intraday trading means buying and selling shares within the same trading day, so every position is closed before the market shuts. Traders use a range of intraday strategies, such as momentum, breakout, reversal, scalping and moving average crossover, to decide when to enter and when to exit. Each one is a set of rules based on how a stock’s price has been moving during the day.
Last reviewed: 3 November 2026
At a glance
| Strategy | What it relies on |
|---|---|
| Momentum | A stock moving strongly in one direction, ridden and exited before the trend reverses |
| Breakout | A rise above resistance or a fall below support, on the belief the move will continue |
| Reversal | Positions taken against the prevailing trend when technical analysis signals an exhausted move; high risk |
| Scalping | Many small profits from tiny price changes, using a small target and stop loss |
| Moving average crossover | A fast moving average crossing above a slow one signals upward movement; crossing below signals coming decline |
What does intraday trading involve?
Intraday trading is a short-term approach. The trader opens a position in the morning or during the session and closes it before the market ends. Nothing is carried overnight.
Because the position is closed the same day, intraday trades involve no delivery of shares. Delivery means taking the shares into your own holdings. An intraday trader instead ends the day with no shares at all, only cash or profit and loss from the trades.
How does borrowed margin change the picture?
Brokers let intraday traders use borrowed margin, which is money lent by the broker against the trader’s own funds. With margin, a trader can handle a larger volume of shares than their own capital would allow.
Hypothetical example (all figures invented for illustration): a trader has ₹1,00,000 of their own money and the broker allows trades worth ₹3,00,000. The trader buys 1,000 shares at ₹300, a total of ₹3,00,000. If the price falls to ₹294 by the close, the loss is ₹6 × 1,000 = ₹6,000, which is 6% of the trader’s own ₹1,00,000. Margin magnifies the loss in the same way it magnifies any gain.
How do momentum and breakout strategies work?
The momentum strategy involves riding a stock that is moving strongly in one direction and exiting before that trend reverses. The trader is betting that the existing move will carry on for a while, and the exit is the point at which they stop betting on it.
The breakout strategy looks at two price levels. Resistance is a price level a stock struggles to rise above, and support is a level it struggles to fall below. A trader using breakouts buys when the stock rises above resistance, or sells when it falls below support, on the belief that the move will continue.
How do reversal and scalping strategies differ?
The reversal strategy is the opposite of following the trend. The trader takes positions against the prevailing trend when technical analysis, meaning chart-based study of past prices and volumes, signals that the move has become exhausted. This strategy carries high risk, because the trend may keep going after the trader has taken the opposite position.
Scalping aims to collect many small profits from tiny price changes. Each trade uses a small target and a small stop loss, and the trader exits quickly. The approach depends on the number of trades adding up, so a run of small losses can offset the small gains.
How does the moving average crossover work?
A moving average is the average price of a stock over a set number of recent periods. A fast moving average reacts quickly to price changes, while a slow one moves more gradually.
The moving average crossover strategy treats a fast moving average crossing above a slow one as a sign of upward movement. A fast average crossing below a slow one is treated as a sign of coming decline. The signal is only as reliable as the price data behind it, and the crossings can happen in choppy markets without any lasting move.
What is a stop-loss order and why does it matter?
A stop-loss order automatically sells a position once the price reaches a preset level. It limits how much a trader can lose, because the trader decides the exit price before the trade begins.
Hypothetical example (figures invented for illustration): a trader buys shares at ₹300 with a stop-loss at ₹294. The most the trader can lose per share is ₹6, regardless of how far the price falls after that. Without a stop-loss, the loss on the same position has no preset limit.
Why is intraday trading considered riskier?
Intraday trading is considered riskier than long-term investing. Three features explain why. Borrowed margin enlarges both gains and losses, the reversal strategy carries high risk, and the frequent trades of scalping leave little room for error on each one.
For this reason, beginners are advised to learn strategies and risk controls first. Risk controls include tools such as the stop-loss order. Understanding how each strategy can fail is part of learning it.
Frequently asked questions
Does intraday trading involve taking delivery of shares?
No. Intraday trades involve no delivery of shares, because the trader closes the position the same day instead of taking the stock into their holdings.
Can intraday traders trade more than their own capital allows?
Yes. Brokers let intraday traders use borrowed margin, so they can trade a larger volume of shares than their own capital would allow.
What does a stop-loss order do?
A stop-loss order automatically sells a position once the price reaches a preset level. This limits how much a trader can lose.
Is intraday trading riskier than long-term investing?
Yes, intraday trading is considered riskier than long-term investing, which is why beginners are advised to learn strategies and risk controls first.
Sources and last check
Facts in this article were checked against the sources below on 3 November 2026. Rules and figures can change; check the primary source before acting.
- groww.in (broker education)
- upstox.com (broker education)
- dhan.co (broker education)
- icicidirect.com (broker education)
- kotakneo.com (broker education)
This article is general information, not investment advice. MyFinanceBandhu is not a SEBI-registered investment adviser.
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