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Risk Management metrics in Intraday Trading | Intraday Basics

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Generally speaking in my experience Intraday is too risky to make a profit and I feel it is not a suggestible way to enter without prior experience. It is even riskier than options and futures because in Intraday trading the positions must be cleared at the end of the day even if you make a huge loss. Again it entirely depends upon one stock rather than an index in options.

What makes Intraday trading so special

Money can be made within seconds and the same happens vice versa. Intra-trading is not a new concept in trading but it is not known widely to people.

So, proper risk management has to be taken while making intraday trading

Stop loss 

A stop loss is an option that is used to control or resist the loss when the price triggers.


If you bought ITC shares for 400 Intraday. Suppose your target is 410 and loss bearability is 390. 

You will put a stop loss for 390 because you want to exit the position when the price falls to 390.

Proper sizing and positioning 

Sizing and positioning in the market are very crucial steps before doing a trade. Positioning determines the size of traders’ position in a trade. A lot of factors influence the positioning of trade and some are market conditions, risk tolerance, and technical analysis.

Using technical analysis

Technical analysis is the heart of intraday trading and without technical knowledge, there is no way one can make money. Technical analysis tells us the momentum of the candle sticks using numerous technical charts. Candlestick trading comes under technical analysis. 

Make sure to gain the required knowledge on Technical charts like moving averages, Bullish and bearish engulfing, and others.

Control emotions over fear.

It is possible to kill the entire world with emotions if they are perceived in the wrong way. Everyone has emotions when they do something, but people who control their emotions during challenging times will live a more peaceful life than those who take the challenge head-on.

Losers in the stock market will take it as a challenge to recover their losses by losing everything. The stock market is not a challenging game even if it is then no body will take part in it. It’s simple if one person loses money, another gains money. Sometimes it’s you and sometimes it’s other than you.

Emotions play a significant role in risk management in intraday trading. Better control your emotions you lose money. Don’t take it as a challenge to recover the loss. Blindly following your own way of thinking will not work out.

Over leveraging

Leveraging is a gifted option available for Intraday traders to use the broker’s money for trading. generally, brokers give 5x leverage on stocks for a whole day.

For example, if you have 1000 rupees in your trading account. let’s choose a stock of X having its share price of 1000. In normal cases, you can only buy one share but through the leverage option, you can buy 5 shares.

But overusing leveraging is playing a game with life or death. The more leverage you take, the more risk you will bear and it doesn’t make any sense if you cannot have control of your mind.

Bottom line

Intraday is too risky but not too much when the trade is executed with proper management of the above metrics.