Intraday trading is a commonly preferred method of trading in which investors or traders sell or buy the stock on the same day. The primary objective of this trading method is to raise capital, mitigate the risks associated with holding securities, and generate profit from short-term price fluctuations. For intraday trading, traders need a highly volatile and highly liquid asset to maximise profits.
In stock exchanges, whether BSE or NSE, or the commodities market like MCX or NCDEX, there is a fixed intraday trading time. Let’s see what that is and its different aspects.
Intraday Trading Time in the Indian Stock Exchange
The stock market in India is characterized by a fixed and limited period of trading time for traders and investors, which usually starts from 9:15 am and ends at 3:30 pm. The intraday trading time is the same time period allocated for the opening and closing of the stock market, but with slight differences. Here is how:
- Intraday Trading Opening Time: 9:00 am – 9:15 am
- Intraday Trading Closing Time: 3:30 pm
- Intraday Square-off Time: 3:15 pm
- Intraday Settlement Time: 3:30 pm
Understanding these timings is important for traders who indulge in intraday trading. Also, there are different time slots that need to be considered. Let’s see what those are.
Different Time Frame for Intraday Trading
For the specific purposes of intraday trading, the following are the different time frames in which traders or investors can sell or buy assets.
| Intraday Time Frame | Description |
|---|---|
| 1-Minute | This time frame represents granular and small price fluctuations in the market, and is ideal for investors looking for short-term signals. |
| 3-Minute | The 3-minute cart or middle cart represents one of the highly favourable time frames, where investors need to quickly respond to the market trends and spot the perfect entry and exit points. |
| 5-Minute | The 5-minute time frame is for traders who want to observe the market in detail, to easily identify a more stable and enlarged view of the market. |
| 15-Minute | It is a popular time frame for experienced and expert investors to gain deep insights of the market and identify potential breakouts. |
| 30-Minute | This time frame is suitable for swing trading, offering a broad perspective and low noise in the market. |
| 60-Minute | The longest time frame for intraday trading allows traders to examine long-term trends in the market and potential reversals. |
Pre-Open and Post-Closing Market Trading Sessions
BSE and NSE offer pre and post-trading sessions to facilitate the listing, buying, and selling of stocks. Let’s see a comprehensive overview of how these sessions work.
Pre-Open Market Session
Pre-open session starts in the market from 9:00 AM to 9:15 AM and includes a thorough overview of the opening prices of securities in the market every day. During the initial 8 minutes (i.e., from 9:00 am to 9:08 am), the order window is open for the collection, modification, and cancellation of orders. This window closes between 9:07 am – 9:08 am, after which the buffer period starts (9:08 am – 9:15 am). In the buffer period, the stock exchange finalises all the orders and matches them accurately to ensure a fair opening price.
Post-Closing Market Session
Post-closing market session starts from 3:30 pm – 4:00 pm and allows investors to buy or sell the security at the closing price. From 3:30 pm – 3:40 pm, the exchange calculates the average of all trade prices between 3:00 pm – 3:30 pm and determines a closing price. From 3:40 pm – 4:00 pm, market orders are placed and executed at the closing price.
Which Time is Best for Intraday Trading in the Indian Stock Exchange?
Rather than examining and observing the market the entire day from its opening to closing, traders should focus on a particular time of the day when the market is high. Typically, there are two slots which are the best time frame for intraday trading. Those are:
- 9:30 am – 10:30 am: At this time, the market is usually highly volatile, and the price fluctuations signify good earning potential.
- 2:30 pm – 3:30 pm: At this time, the market is closing and characterised by significant ups and downs in the prices.
At these time frames, if a trader cautiously chooses the entry and exit points, they can earn sufficient profits. However, it is not compulsory that every decision results in a profit. Some sudden and rash decisions also result in negative earnings i.e., losses. So, it is advisable to examine and study the market carefully for guaranteed profits.
Intraday Square Off Time
Another important concept in learn intraday trading is square-off time, which represents the cut-off time by which all the positions in the market should be closed for the day. In the Indian stock market, the intraday square time off starts by 3:15 pm and usually ends at 3:30 pm. If any position is not squared off by that time, for any reason, it is automatically squared off by a broker. The trader has to pay a penalty fee if they are unable to square off their position within the given time frame.
Square time off is an important concept which ensures that the trader does not carry any intraday position to the next day.
The 11 AM Rules of Intraday Trading
The 11 AM rule in intraday trading is a well-established norm that the market typically establishes a clear picture and direction by 11 am. By this time, the market trends and price fluctuations driven by various factors and early morning volatility are settled. A stability came across the market by this time. It is widely observed that after 11 am, traders can have a clearer and more deceptive picture of the market. This helps them in planning their next moves for the rest of the day.
By following the 11 AM rule, traders can get valuable insights and make a smart, informed, and fruitful decision that significantly makes a difference in their earnings.
Intraday Trading in the Commodity Market
Intraday trading is also conducted in MCX (Multi Commodity Exchange) and NCDEX (National Commodity Exchange) for selected categories of commodities. Here is a comprehensive overview of the timings and commodities that can be exchanged.
| Commodity Market | Commodities traded | Regular Session | Evening Session |
|---|---|---|---|
| Multi-Commodity Exchange | Copper, Lead, Zinc, Gold, Aluminum, Crude Oil, Natural Gas, and Nickel | 9:00 AM to 5:00 PM | Starts at 5:00 PM and ends at 11:30 PM |
| National Commodity Exchange | Wheat, Coriander, Sugar, Cotton, Chana, Maize, Guar Seed, Turmeric, Cumin, and Castor Seed | 9:00 AM to 5:00 PM | Starts at 5:00 PM and ends at 11:30 PM |
Conclusion
Intraday trading is one of the most comprehensive forms of trading for those who do not wish to hold the asset for a relatively longer period of time. It involves careful analysis of the market, effective strategy, thorough knowledge of the time frames and square-off time, and precision. For successful intraday trading, the trader needs to analyse the market movements carefully and pick a suitable time frame. An unreasonable and irrational move can lead to huge losses. So, traders should be cautious and monitor the price fluctuations precisely.
Frequently Asked Questions
1. Is a 5-minute or a 15-minute time frame good for intraday trading?
A 5-minute time frame is quite popular as it offers sufficient time to analyse the market and trade. On the other hand, a 15-minute time frame offers a more elaborate and broader perspective of the market. Traders can choose either time frame according to their knowledge, preference, and risk management.
2. What is intraday multi-time frame analysis?
Intraday multi-time frame analysis generally involves checking the price of the same currency or asset across different time frames.
3. What is the key strategy for successful intraday trading?
The key strategy for successful intraday trading is to analyse the stocks whose price fluctuates daily, monitor the market carefully, and buy the highly liquidated stocks at low prices and sell them at high prices.