🧠 What is Intraday Trading for Beginners?
Intraday trading for beginners refers to buying and selling financial instruments within the same trading day. In this blog, we will focus on derivative trading using the Nifty Index.
📘 What is Derivative Trading?
Derivative trading means you’re not trading the actual stock or index, but a contract based on its future price movement. This is key for anyone learning how to start intraday trading for beginners.
For example, if Nifty 50 is at 22,500, here are your three main derivative trading options:
✅ 1. Buy a Call Option (Best for Beginners)
- You buy the right to buy Nifty at 22,500 in the future.
- If Nifty goes up — you profit.
- If Nifty goes down — your loss is limited to the premium paid.
✅ 2. Buy Nifty Futures
- You agree to buy Nifty at today’s price in the future.
- Profits are unlimited if Nifty goes up.
- But losses can also be unlimited if it drops.
🚫 3. Sell a Put Option
- You earn a premium by selling a contract that bets Nifty will fall.
- If Nifty rises — you keep the premium.
- If Nifty crashes — your loss may be large.
🤔 Option Buying or Selling — What’s Better for Beginners?
We’ve already discussed this in detail here — but for this blog, we will focus on option selling using a strategy known as the Credit Spread.
🎯 Two Key Skills in Intraday Trading
- Probability – You must estimate how likely it is that your trade will be right.
- Risk-Reward Ratio (RRR) – How much risk are you taking to make a certain profit?
🔧 Strategy: Credit Spread Using Option Selling
Despite the myth that option selling requires huge margins and unlimited risk, if done with proper strategy, it can be profitable.
Indicator to Use: Supertrend
Use Supertrend for direction detection.
📈 Real Examples from 3rd & 4th April
| Date | Direction | Strategy Used | Result |
|---|---|---|---|
| 3rd April | Bearish | Sell ATM + Buy 2 OTM (Credit Spread) | -70 points |
| 4th April | Bearish | Same Setup | +300 points |
Even if the market stays sideways, you benefit due to option premium decay.
⚠️ Important Caution for Beginners
Intraday trading for beginners is not as easy as it looks on paper. Without proper knowledge, risk management, emotional control, and discipline, you could lose more than you invest.
📚 Recommended Resources
- NSE Derivatives Market
- Investopedia: Options Trading Basics
- Option Buying or Selling — Which is Best?
See you in next blog !
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